TETRA Technologies' Q3 2025 Earnings Call: Contradictions Emerge on Offshore Market, Neptune Projects, and TETRA Oasis Commercialization

Date of Call: October 29, 2025

Financials Results

• Revenue: $153M for Q3 2025, up 8% YOY; year-to-date revenue $484M (a 10-year high)

Guidance:

• Total-year 2025 adjusted EBITDA now expected to be $107M–$112M (prior $100M–$110M).
• Q4: expect continued onshore weakness; timing of deepwater projects will determine placement within guidance; a Q4 noncash lease termination charge is expected.
• Arkansas bromine plant on schedule and under budget; full operation by end of 2027; projected incremental run-rate of ~$200M–$250M revenue and $90M–$115M adjusted EBITDA per feasibility report.
• FEED for 25,000 bpd desalination plant complete; first commercial contract could be signed in coming quarters and detailed engineering may begin pre-contract.
• Eos ramp and Argentina/Middle East awards expected to be material tailwinds in 2026.

Business Commentary:

• Record Revenue and Adjusted EBITDA:
• TETRA Technologies reported the highest revenue of $484 million and adjusted EBITDA of $93 million in the past 10 years for Q3 2025.

• This was driven by strong performance in chemicals and deepwater completion fluids, despite a 40% lower deepwater rig count compared to 10 years ago.

• Completion Fluids & Products Revenue Growth:

• Completion Fluids & Products revenues increased by 39% compared to the previous year period.

• This growth was fueled by successful completion of TETRA Neptune wells, increased demand for high-density zinc bromide completion fluids, and strong contributions from Brazil deepwater projects.

• Onshore Activity and Cost Controls:

• Water & Flowback Services revenue declined by 2% in Q2 and 18% year-over-year, but adjusted EBITDA rose 18% sequentially.

• Sequential adjusted EBITDA margins improved by 200 basis points to 12% due to better cost controls and higher utilization of automated units.

• Argentina Market Expansion:

• TETRA was awarded five contracts in Argentina related to production testing and SandStorm, which are expected to double revenue next year.

• The expansion in Argentina is anticipated to minimize uncertainty in the U.S. onshore activity.

• One TETRA 2030 Strategy:

• TETRA's One TETRA 2030 strategy aims to double revenue and triple adjusted EBITDA by 2030 by leveraging core fluids chemistry expertise into new high-growth end markets.
• The strategy focuses on battery electrolytes for long-duration energy storage and oil and gas produced water desalination solutions.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted record YTD revenue of $484M and adjusted EBITDA of $93M, Q3 revenue of $153M (up 8% YOY), raised full-year EBITDA guidance to $107M–$112M, and repeatedly stated confidence in One TETRA 2030 and upcoming commercial milestones (bromine plant, Eos ramp, desalination FEED completion).

Q&A:

• Question from Robert Brooks (Northland Capital Markets): Are there any further engineering steps for Oasis after the FEED and what are the next steps?
  Response: FEED validated CapEx/OpEx and enables commercial discussions (7 NDAs); detailed engineering remains but company is confident and will start detailed engineering and commercial talks.

• Question from Robert Brooks (Northland Capital Markets): Will detailed engineering be kicked off after a commercial agreement or before?
  Response: TETRA is obtaining proposals and plans to start detailed engineering ahead of signed commercial contracts.

• Question from Robert Brooks (Northland Capital Markets): On CFP sales, is the ~$90M sequential decline all due to Neptune absence and seasonal calcium chloride, and what drove the $15M YOY increase?
  Response: Main drivers were European calcium chloride seasonality and the absence of Neptune volumes; partially offset by ramping Brazil activity.

• Question from Martin Malloy (Johnson Rice & Company): How confident are you in offshore strength for 2026–2027 and any early signs Neptune projects could occur in 2026?
  Response: High confidence in 2026–2027 given customer conversations and subsea-tree order trends; pipeline for Neptune is strong and management expects work in 2026 but won't provide specifics until awarded.

• Question from Martin Malloy (Johnson Rice & Company): Remind us of the desalination commercial model and typical CapEx for a standard facility?
  Response: TETRA retains ownership of core technology with flexible models (licensing, shared-capex, or customer-funded); order-of-magnitude CapEx roughly $1M per 1,000 bpd for core tech, excluding site civil works and power.

• Question from Stephen Gengaro (Stifel): Puts and takes into 2026 vs 2025 for fluids and timing of deepwater recovery?
  Response: 2026 tailwinds include Argentina ramp (expected to double Argentina revenue), Middle East SandStorm wins, Eos ramping volumes, and visible deepwater projects in Gulf of America, Brazil and North Sea; Neptune timing may shift but overall outlook is strong.

• Question from Stephen Gengaro (Stifel): Excluding Eos, does fluids grow in 2026 over 2025?
  Response: Yes—management expects fluids growth in 2026 even excluding Eos due to deepwater activity.

• Question from Tim Moore (Clear Street): Update on Eos beneficial reuse/agrigrowing season and any remaining regulatory milestones in Texas for a first customer?
  Response: Pilot with Eos is progressing well (NDA limits detail); permitting is customer-led and regulators have been constructive—no regulatory red flags identified by management.

• Question from Tim Moore (Clear Street): What is TETRA's lead-time visibility and turnaround for Eos orders?
  Response: Frequent (weekly/biweekly) coordination with Eos; TETRA can fulfill purchase orders from West Memphis facility within ~30 days.

• Question from Tim Moore (Clear Street): How is the industrial calcium chloride business performing year-to-date—has it grown meaningfully?
  Response: Calcium chloride is outperforming expectations with record quarters, expanding applications and market share; management highlights strong outperformance versus CPI and GDP.

• Question from Joshua Jayne (Daniel Energy Partners): Which offshore markets (Brazil, Gulf of America, North Sea) will hold up best if operators become cautious?
  Response: Brazil (full-year benefit next year), Gulf (tertiary wells remain economic) and North Sea (Norway/Equinor activity) are all expected to remain resilient and support multiyear growth.

• Question from Joshua Jayne (Daniel Energy Partners): How do you see SandStorm opportunities in Saudi evolving and will it require more capital?
  Response: Saudi SandStorm award is an initial foothold likely to catalyze broader multi-year opportunities; management framed it as a growth enabler rather than a major incremental capital consumer today.

Contradiction Point 1

Confidence in Offshore Market and Neptune Projects

It involves differing levels of confidence in the offshore market and the Neptune projects, which could impact investor expectations and strategic planning.

What is your confidence in the offshore market for 2026 and 2027, and are there early indications about Neptune projects? - Martin Malloy (Johnson Rice & Company, L.L.C., Research Division)

2025Q3: We have strong confidence in the offshore market for 2026 and beyond, with Neptune projects likely to continue based on our pipeline and customer discussions. - Brady Murphy(CEO)

Can you provide insight into this quarter versus the next? Or should we expect similar financial performance in both quarters? - Jesse Sobelson (D. Boral Capital)

2025Q2: While we're encouraged by those indicators, it's difficult to see the pace of activity recovering to first-half levels in the second half. - Brady Murphy(CEO)

Contradiction Point 2

Desalination Technology and Productivity

It involves differing statements about the productivity of desalination technology, which is crucial for the company's growth and strategic positioning.

Can you provide capital cost details for desalination facilities and discuss ownership models? - Martin Malloy (Johnson Rice & Company, L.L.C., Research Division)

2025Q3: We are using a licensing or shared capital model. TETRA maintains ownership of core technology. Capital cost is about $1 million per 1,000 barrels of desal, but includes civil works and power source considerations. - Brady Murphy(CEO)

Could you provide a concise overview of the economics of desalinization projects, including energy usage and costs for produced water, as well as legislative initiatives and potential demand you're monitoring? - Martin Whittier Malloy (Johnson Rice)

2025Q2: Overall, we believe the economics of the water will be good. Now remember, these are solutions that operators do not have today, they have to spend millions of dollars in fees to dispose of this water. - Brady Murphy(CEO)

Contradiction Point 3

Commercialization Progress of TETRA Oasis

It involves differing perspectives on the progress and challenges related to the commercialization of TETRA Oasis, impacting expectations for the technology's market adoption and company revenue.

What are the remaining engineering tasks for Oasis commercial engineering, or other next steps? - Robert Brooks (Northland Capital Markets, Research Division)

2025Q3: The next steps involve socializing the economics with customers. Detailed engineering will follow commercial discussions. - Brady Murphy(CEO)

What are the main barriers from potential customers in commercializing TETRA Oasis? - Bobby Brooks (Northland Capital Markets)

2025Q1: The main hurdles include getting customers comfortable with the technology and the evolving regulatory framework. - Brady Murphy(CEO)

Contradiction Point 4

Deepwater Market Outlook

It involves differing assessments of the stability and future outlook of the deepwater market, which is crucial for the company's growth and investor expectations.

Can you discuss your confidence in the offshore market through 2027 and any early signs for Neptune projects? - Martin Malloy (Johnson Rice & Company, L.L.C., Research Division)

2025Q3: We have strong confidence in the offshore market for 2026 and beyond, with Neptune projects likely to continue based on our pipeline and customer discussions. - Brady Murphy(CEO)

How does the deepwater market outlook compare to February when WTI was below $70? - Bobby Brooks (Northland Capital Markets)

2025Q1: Deepwater projects have long term cycles and have not been impacted by current market uncertainty. Uncertainty remains for future projects if oil prices stay low. - Brady Murphy(CEO)

Contradiction Point 5

Neptune Project Visibility and Cadence

It involves the visibility and expected cadence of Neptune projects, which are critical for revenue projections and market expectations.

Can you share your confidence in the offshore market for 2026-2027 and early signs on Neptune projects? - Martin Malloy (Johnson Rice & Company, L.L.C., Research Division)

2025Q3: We have strong confidence in the offshore market for 2026 and beyond, with Neptune projects likely to continue based on our pipeline and customer discussions. - Brady Murphy(CEO)

Will Neptune projects become a more consistent contributor in future quarters? - Stephen Gengaro (Stifel, Nicolaus & Company, Incorporated, Research Division)

2024Q4: The Neptune pipeline has become more visible, with more potential projects on track, suggesting an increased cadence for Neptune projects in the future. - Brady Murphy(CEO)