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Cactus (WHD) Q2 EPS fell 18.5% to $0.66, missing estimates, while GAAP revenue declined 5.8% to $273.6 million. The Pressure Control segment saw revenue drop 5.5% sequentially and 4.0% YoY, citing lower frac equipment rental and tariff pressures. Despite this, the quarterly dividend increased 8% to $0.14 per share. The company remains financially stable and is executing on strategic initiatives, but faces operational and margin headwinds in its core markets.

Cactus Inc. (WHD) reported its Q2 2025 earnings, revealing a miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.66, falling short of the expected $0.72, marking an EPS surprise of -8.33% [1]. Revenue came in at $273.6 million, below the anticipated $278.79 million, resulting in a revenue surprise of -1.86%.

Following the earnings release, Cactus’ stock dropped by 10.73% to $46.57 in after-hours trading, reflecting investor disappointment. Despite the earnings miss, InvestingPro data shows the company maintains a GREAT financial health score of 3.2/5, with particularly strong marks in profit and cash flow metrics. Key Takeaways Cactus missed both EPS and revenue forecasts for Q2 2025. The stock price fell by 10.73% in after-hours trading. The company increased its dividend by 8% to $0.14 per share. Acquired a majority interest in Baker Hughes’ surface pressure control business. Reduced full-year CapEx outlook to $40-$45 million.

Company Performance Cactus Inc. experienced a decline in its financial metrics compared to the previous quarter. The company reported a sequential revenue decrease of 2.4% to $274 million and a 7.6% drop in adjusted EBITDA to $87 million. The adjusted EBITDA margin decreased from 33.5% in Q1 to 31.7% in Q2. Net income also fell from $54 million in Q1 to $49 million in Q2. Financial Highlights Revenue: $274 million (down 2.4% sequentially) Adjusted EBITDA: $87 million (down 7.6% sequentially) Adjusted EBITDA Margin: 31.7% (down from 33.5% in Q1) Net Income: $49 million (down from $54 million in Q1) Adjusted EPS: $0.66 (down from $0.73 in Q1) Cash Balance: $45 million (increased by $58 million sequentially) Earnings vs. Forecast Cactus Inc.’s Q2 2025 EPS of $0.66 was below the forecasted $0.72, resulting in a negative EPS surprise of -8.33%. Revenue also missed expectations, coming in at $273.6 million compared to the forecasted $278.79 million, a surprise of -1.86%. This marks a deviation from previous quarters where the company generally met or exceeded forecasts.

Market Reaction Following the earnings announcement, Cactus’ stock price dropped significantly by 10.73% to $46.57 in after-hours trading. This decline reflects investor concerns over the missed earnings and revenue forecasts. The stock is now closer to its 52-week low of $33.80, highlighting the market’s negative sentiment. According to InvestingPro analysis, the company appears undervalued at current levels, with 12 additional ProTips available to subscribers, including insights on dividend consistency and cash flow strength.

Outlook & Guidance Looking ahead, Cactus expects Q3 revenue from its Pressure Control segment to decrease by mid to high single digits, with EBITDA margins projected between 28-30%. The company anticipates the acquisition of Baker Hughes’ surface pressure control business to close in late 2025 or early 2026, which could enhance its market position. InvestingPro data reveals that analysts maintain a moderate buy consensus, with price targets ranging from $39 to $57. Subscribers can access the comprehensive Pro Research Report, which provides detailed analysis of Cactus’s growth prospects among 1,400+ top US stocks.

Executive Commentary CEO Scott Bender commented, "We believe the sharpest domestic activity declines for 2025 are behind us." He also highlighted the company’s confidence in its cash flow durability, which is reflected in the recent dividend increase. Bender noted that international markets are expected to be more stable compared to the domestic market.

Risks and Challenges Supply Chain Issues: Continued focus on supply chain diversification is crucial. Market Saturation: Competition in pressure control products remains intense. Macroeconomic Pressures: Fluctuating oil prices could impact cost recovery. Legal Disputes: Ongoing legal challenges, such as with Cameron, present risks. Capital Discipline: Customers’ focus on capital discipline may affect demand.

Q&A During the earnings call, analysts inquired about the impact of unexpected tariff increases and challenges in cost recovery due to oil price fluctuations. The strategy for the Baker Hughes acquisition and the ongoing legal dispute with Cameron were also discussed, providing insights into the company’s future plans and potential hurdles.

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-cactus-inc-misses-q2-2025-earnings-expectations-93CH-4164128