Earnings call transcript: Cactus Q3 2025 beats earnings forecasts, stock rises

Cactus Inc. (NYSE:WHD) reported its third-quarter 2025 earnings, surpassing Wall Street expectations with an EPS of $0.67, compared to the forecasted $0.58. The company’s revenue also exceeded predictions, reaching $264 million against an expected $257.08 million. Following the release, Cactus shares saw a 5.43% increase, trading at $43 in premarket sessions. This performance aligns with InvestingPro data showing the company has remained profitable over the last twelve months with a diluted EPS of $2.67.

Key Takeaways

• Cactus reported higher-than-expected earnings per share and revenue for Q3 2025.
• The company’s stock price increased by over 5% in premarket trading.
• Cactus is expanding its international presence, particularly in the Middle East and Africa.
• The company is preparing for the upcoming Baker Hughes Surface Pressure Control business acquisition.
• Cactus is launching a new wellhead system in Q1 2026.

Company Performance

Cactus Inc. demonstrated solid performance in Q3 2025, with revenue totaling $264 million, a sequential decline of 3.5%. Despite this, the company maintained an adjusted EBITDA of $87 million, consistent with the previous quarter. The adjusted EBITDA margin improved to 32.9% from 31.7% in Q2 2025. The company’s net income stood at $50 million, and it reported a cash balance of $446 million, up by $40 million sequentially.

Financial Highlights

• Revenue: $264 million (3.5% sequential decline)
• Earnings per share: $0.67 (exceeded forecast of $0.58)
• Adjusted EBITDA: $87 million (flat from Q2)
• Adjusted EBITDA Margin: 32.9% (up from 31.7% in Q2)
• Net Income: $50 million
• Cash Balance: $446 million (sequential increase of $40 million)

Earnings vs. Forecast

Cactus outperformed market expectations with an EPS of $0.67, surpassing the forecast by 15.52%. The revenue of $264 million also exceeded the anticipated $257.08 million, marking a revenue surprise of 2.67%. This performance is notable compared to previous quarters, highlighting the company’s resilience and operational efficiency.

Market Reaction

Following the earnings announcement, Cactus’s stock price rose by 5.43%, reaching $43 in premarket trading. This upward movement reflects investor confidence in the company’s ability to exceed financial expectations. The stock is trading within its 52-week range, with a low of $33.20 and a high of $70.01, indicating room for potential growth.

Outlook & Guidance

Looking ahead, Cactus expects Q4 2025 Pressure Control revenue to remain flat, with EBITDA margins projected between 31-33%. The Spoolable Technologies segment is anticipated to see a low double-digit revenue decline, with EBITDA margins between 34-36%. The company plans to close its acquisition of Baker Hughes SPC in early 2026, which could enhance its market position.

Executive Commentary

CEO Scott Bender emphasized the company’s adaptability, stating, "We’re very aggressive in terms of flexing the organization." He also highlighted potential risks, noting, "The downside risk of oil prices is far greater than upside potential." Bender expressed confidence in mitigating tariff impacts, predicting "substantial displacement of Chinese shipments into the U.S. by mid next year."

Risks and Challenges

• Supply Chain Restructuring: Ongoing efforts to mitigate tariff impacts could face challenges.
• Market Saturation: Potential risks in maintaining market share amid competitive pressures.
• Macroeconomic Pressures: Fluctuations in oil prices could impact revenue and profitability.
• International Activity: Anticipated subdued market activity in 2026 may affect growth.
• Acquisition Integration: The successful integration of Baker Hughes SPC is crucial for future success.

Q&A

During the earnings call, analysts inquired about Cactus’s strategies for tariff mitigation and international market opportunities. The company also addressed questions regarding its expansion into unconventional drilling and the ramp-up of manufacturing in Vietnam. These discussions underscore Cactus’s proactive approach to navigating industry challenges and capitalizing on growth opportunities.

Full transcript - Cactus Inc (WHD) Q3 2025:

Alan Boyd, Director of Corporate Development and Investor Relations, Cactus: Good day and thank you for standing by. Welcome to the Cactus Quarter 3 2025 earnings call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a quick Q&A session. To ask a question during your session, you will need to press star 1 1 on your telephone. You will then be advised that your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Alan Boyd, Director of Corporate Development and Investor Relations. Please go ahead.

Scott Bender, Chairman and Chief Executive Officer, Cactus: Thank you and good morning. We appreciate you joining us on today’s call. Our speakers will be Scott Bender, our Chairman and Chief Executive Officer, and Jay Nutt, our Chief Financial Officer. Also joining us today are Joel Bender, President, Steven Bender, Chief Operating Officer, Steve Tadlock, CEO of FlexSteel, and Will Marsh, our General Counsel. Please note that any comments we make on today’s call regarding projections or expectations for future events are forward-looking statements covered by the Private Securities Litigation Reform Act. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC.

Any forward-looking statements we make today are only as of today’s date and we undertake no obligation to publicly update or review any forward-looking statements. In addition, during today’s call we will reference certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release. With that, I will turn the call over to Scott. Thanks, Alan, and good morning. I’m extremely pleased with our third quarter performance. Pressure Control margins improved sequentially due to our tariff mitigation and cost reduction efforts, while spoolable technology sales and margins exceeded expectations on higher international shipments. These outcomes are the result of extensive efforts and focus from our team and I’m very grateful. Some third quarter total company financial highlights include revenue of $264 million, adjusted EBITDA of $87 million, adjusted EBITDA margin of 32.9%.

We paid a quarterly dividend of $0.14 per share and we increased our cash balance to $446 million. I’ll now turn the call over to Jay Nutt, our CFO, who will review our financial results. Following his remarks, I’ll provide some thoughts on our outlook for the near term before opening the line for Q&A. Jay, thank you, Scott.

Alan Boyd, Director of Corporate Development and Investor Relations, Cactus: As Scott Bender just mentioned, total Q3 revenues were $264 million, a sequential 3.5% decline, and total adjusted EBITDA was $87 million, approximately flat from the second quarter. For our Pressure Control segment, revenues of $169 million were down 6.2% sequentially, driven primarily by lower frac rental revenues as we continued to focus on our consumable business. Operating income increased $2.2 million or 5.2% sequentially, with operating margins increasing 290 basis points, and adjusted segment EBITDA was $2.1 million or 3.9% higher sequentially, with margins increasing by 320 basis points. The margin increase was primarily due to the implementation of cost reduction initiatives, tariff mitigation efforts, and reduced legal expenses. For our Spoolable Technologies segment, revenues of $95 million were down 1% sequentially on lower domestic customer activity levels, mostly offset by increased international sales.

Operating income decreased $2.2 million or 8% sequentially, with operating margins decreasing 210 basis points due to higher input cost. Adjusted segment EBITDA decreased $2 million or 5.2% sequentially, while margins declined by 160 basis points. Corporate and other expenses declined to half a million dollars to $9.1 million in Q3, which included $3.2 million of professional fees associated with the announced plan to acquire a majority interest in the Surface Pressure Control business of Baker Hughes. Adjusted corporate EBITDA was down slightly to $4.2 million of expense on a total company basis. Third quarter adjusted EBITDA was $87 million, flat from the second quarter. Adjusted EBITDA margin for the third quarter was 32.9% compared to 31.7% for the second quarter.

Adjustments to total company EBITDA during the third quarter of 2025 include noncash charges of $6.1 million in stock-based compensation, $3.2 million for transaction-related professional fees, and $247,000 for continued severance actions to right-size the organization for lower activity levels. Depreciation and amortization expense for the third quarter was $16 million, which includes an ongoing $4 million of amortization expense related to the intangible assets resulting from the FlexSteel acquisition. During the third quarter, the public or Class A ownership of the company averaged and ended the period at 86%. GAAP net income was $50 million in the third quarter versus $49 million during the second quarter. Book tax expense during the third quarter was $14 million, resulting in an effective tax rate of 22%.

Adjusted net income and earnings per share were $54 million and $0.67 per share, respectively, during the third quarter compared to $53 million and $0.66 per share in the second quarter. Adjusted net income for the third quarter was net of a 25% tax rate applied to our adjusted pre-tax income, consistent with the prior quarter. During the quarter, we paid a quarterly dividend of $0.14 per share, resulting in a cash outflow of approximately $11 million, including related distributions to members. We ended the quarter with a cash balance of $446 million, a sequential increase of approximately $40 million. Inventory build has represented a working capital headwind year to date, which has decreased our usual pace of cash flow, with most of the increase in the carrying value being due to tariffs rather than increased quantities of inventory on hand.

Net CapEx was approximately $8.2 million during the third quarter of 2025. In a moment, Scott will give you our fourth quarter operational outlook. Some additional financial considerations when looking ahead to the fourth quarter include an effective tax rate of 22% and an estimated tax rate for adjusted EPS continuing at 25%. Total depreciation and amortization expense during the fourth quarter is expected to be approximately $16 million, with $7 million associated with our Pressure Control segment and the remaining $9 million in spoolable technologies. Our full year 2025 net CapEx outlook remains in the range of $40 to $45 million, including the $6 million equity investment made into Vietnam. Additionally, the annual TRA payment and related member distribution was delayed to October of 2025 from our previous plan to settle in the third quarter.

The payment and related distributions were made earlier this month and totaled approximately $23 million. Finally, the board has approved a quarterly dividend of $0.14 per share, which will be paid in December. That covers the Financial Review and I’ll now turn the call back over to Scott.

Scott Bender, Chairman and Chief Executive Officer, Cactus: Thanks, Jay. I’ll begin by touching on our current understanding of a highly fluid tariff situation. Through the third quarter, there were no substantial changes in the tariff rates applied to our goods, which were detailed on last quarter’s call. We continue to pay an incremental 70% tariff on most goods imported from China for a 95% total tariff rate and a 50% tariff on most goods imported from Vietnam. We’re seeking further clarity on recent announcements of tariff reductions in the Far East, but based upon the latest information, we expect some reduction in the fentanyl-related tariff rate from China. That said, the Section 232 tariff, which remains at 50%, is far more impactful to our operations. At this point, we are several months into our efforts to mitigate the tariff impact to our business.

I’m proud of the work our team has done to flex the organization and supply chain to improve profitability, and I’m appreciative of the support of our customers and vendors throughout this process. Our Vietnam plant is increasing its pace of shipments, and we still expect substantial displacement of Chinese shipments into the U.S. by mid next year. As we await the finalization of our API certification, I’ll now move on to our expectations for the fourth quarter of 2025 by operating system segment. During the fourth quarter, we expect Pressure Control revenue to be relatively flat versus the $169 million reported in the third quarter, aided by modestly increased activity in our frac rental business, which offsets normal holiday slowdowns. We believe that most industry activity declines for 2025 are behind us and expect the fourth quarter U.S. land rig count to drift modestly lower through the year end.

Adjusted EBITDA margins in our Pressure Control segment are expected to be in the 31% to 33% range for the fourth quarter, staying relatively stable from the third quarter and inclusive of typical seasonal declines in field service utilization. This adjusted EBITDA guidance excludes approximately $3 million of stock-based comp expense within the segment. Shifting to our Spoolable Technologies segment, we are particularly pleased with the progress we’re making on the international side of the business. We achieved our highest international revenue since the acquisition during the third quarter, which served to further our geographic diversification. We expect this momentum to continue. We were recently awarded our first gas service order from a major Middle East NOC and shipped a large order for a new customer in Africa.

Additionally, we recently booked our first commercial order in another major Middle East market for shipment in the first half of 2026, which is our first sour service order in the region. We’re further encouraged by customer interest in newly developed products. For the fourth quarter, we expect total spoolable technologies revenue to be down low double digits sequentially, which is consistent with the typical seasonal pattern in this business. We expect adjusted EBITDA margins to be approximately 34% to 36% for Q4, which excludes $1 million of stock-based comp in the segment, moderating third quarter levels on lower volume. Adjusted corporate EBITDA is expected to be a charge of approximately $4 million in Q4, which excludes $2 million of stock-based comp.

Regarding our planned acquisition of a majority interest in the Surface Pressure Control business at Baker Hughes, integration planning and administrative legal filings are proceeding smoothly and we expect that transaction will close in early 2026. In conclusion, the third quarter demonstrated real progress from our actions to enhance our operating results. The improvement in Pressure Control margins reflects the agility of our organization in responding to highly dynamic market conditions, as we’ve demonstrated through past cycles. The stronger spoolable technologies international revenues are the result of a long-term concerted effort to increase our sales focus in key global markets, which should be enhanced by the increased footprint offered by our announced acquisition of a majority interest in the Baker Hughes Surface Pressure Control business. Domestic activity levels remain subdued, but I’m confident in our ability to continue to outperform and deliver industry-leading returns for our shareholders.

I’d like to close by thanking our associates for their focused commitment on executing for our customers throughout a turbulent market. With that, I’ll turn it back over to the operator and we can begin Q&A. Operator, thank you.

Alan Boyd, Director of Corporate Development and Investor Relations, Cactus: At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press Star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press Star 11 again. Please stand by while we compile the Q and A roster. Our first question comes from David Anderson of Barclays. Your line is open.

Scott Bender, Chairman and Chief Executive Officer, Cactus: Hey, good morning, Scott. How are you? Morning, David. How are you? Good. I have a rather broad question to start.

Alan Boyd, Director of Corporate Development and Investor Relations, Cactus: You probably hate the question, but I’ll ask it anyway.

Scott Bender, Chairman and Chief Executive Officer, Cactus: I was wondering if you can kind of give us a sense as to where your U.S. customers are thinking, what they’re thinking.

Alan Boyd, Director of Corporate Development and Investor Relations, Cactus: What they’re asking about.

Scott Bender, Chairman and Chief Executive Officer, Cactus: In the current environment, 4Q is a little bit softer. There’s no sense of urgency out there. You characterize it just now as subdued. I think you’ve also said customers when acting the oil’s in the 50s. I was just wondering, are your customers concerned that oil prices are going to take another leg down? Are you seeing more than the usual pricing pressure out there, or is this more of a situation where things where customers actually kind of fairly bullish but are just sort of staying flat at these levels, waiting for kind of an oil price signal for next year? I’m just trying to get a handle as to how we should think about upstream spending in 2026 from these 4Q levels that we’re going to see coming out here. Some of the puts and takes.

Yeah, I mean, David, that’s obviously a question that weighs heavily on us. I’m going to give you my personal opinion and I think that the downside risk of oil prices is far greater than upside potential. If I was a betting man, I’d suggest it was going to be between $55 and $60. I also think our customers have taken that into consideration with their plans. I can tell you that they are currently far less transparent than they have been in the past because we’re very much in a wait and see environment. A major part of that, David, is, you know, this is not only the surplus availability coming out of OPEC, but it also has to do with questions about the administration’s implementation and enforcement of Russian oil sanctions. The Russians have proved to be very adept at circumventing sanctions, as have the Iranians.

I think that all of our customers are concerned about that, but none of them, I think, are basing their budgets on $65 oil or even $60 oil. The other, I think, important aspect is that we believe that our larger customers who maintain relatively large inventories in core drilling basins and core basins will be far less susceptible to lower oil prices than some of the privates or independents. It’s very helpful. Thanks a lot, Scott. Okay, please, I was going to ask about the spoolable side. I was wondering if you could explain a little bit on the international opportunities and kind of talk about kind of what was unusual in this quarter that spools were higher and also if you could talk about some of the more attractive markets for this part. I think you said Africa, couple in the Middle East.

You’ve also talked previously about cross selling opportunities with SPC in the Middle East, but you’re already getting awards ahead of that. Could you sort of just talk about a couple of those different markets that you’re seeing for spool in kind of 2026 and 2027 opportunities? Sure. I’m going to defer to Steve Tadlock. Hey David, I think in Q3, I mean really in terms of markets, we’re seeing it worldwide, which is we’re obviously very pleased by that. When I kind of stepped into the role two years ago, we probably had our best concentration in Latin America. That’s just some of the individuals we had down there representing us on the team. Since then we’ve expanded personnel and put them, we’ve utilized the Cactus Wellhead Australia team. They’ve done a great job. We got our first delivery in Q3 to Australia.

We added another individual in Southeast Asia who’s seeing some traction. We’ve added somebody in the Middle East who’s, as Scott mentioned, we had our first sour service order for next year for a Middle East region we’ve never done, a country we’ve never done business in. It’s really across the board. We’re just seeing a lot of interest in the product. I think the introduction of the sour service product in the past year has really opened up the worldwide market, just given the larger sour needs overseas versus the U.S. I think that’s kind of fundamentally what’s happening. It’s increased focus, more personnel and the orders kind of build on themselves. More traction. Somebody moves to another company or they hear about another company using our product and it’s spreading. Appreciate it for the commentary. Thanks. Thanks, guys. Thank you. Thank you, Dave.

Alan Boyd, Director of Corporate Development and Investor Relations, Cactus: Thank you. Our next question comes from Scott Gruber of Citigroup. Your line is now open.

Scott Bender, Chairman and Chief Executive Officer, Cactus: Hey, Scott. Yes. Good morning. Good morning. Good morning. Really excellent margin performance here in Pressure Control during the quarter. Can you just unpack that a bit more for us? You know, was that greater acceptance of tariff surcharges than anticipated or did you pull the cost level lever harder during the quarter? Just unpack that Pressure Control margin beat a bit for us. Mr. Gruber, you know I’m not going to comment on price changes, don’t you? Yes, you do. I tried. You always try. Let me just say it’s a combination, but I’m not going to focus on the relative contributions. Think about this. You know, we really are blessed to have the best supply chain guy in the industry. He happens to be my brother, but I’m still objective about that. He’s done a great job of getting receiving cooperation from our suppliers. That’s the first point.

I think the second point is that we do have some very understanding customers because we’ve supported them and they continue to support us. We’re very aggressive in terms of flexing the organization in terms of activity. Keep in mind, and I’ve said this before, that because we’re primarily in a variable cost business, it’s much easier for us to flex down than it is for oilfield service companies that have relatively high fixed costs. It really is a combination of all those things. That team has just done a great job. We’ve also redirected our supply chain to minimize the impact of tariffs and because we have purchasing power, which by the way will only be enhanced we expect by the addition of Baker Hughes Surface Pressure Control business. Scott, it’s not the answer you wanted, but it’s all I can give you right now.

No, I appreciate all the color and.

Alan Boyd, Director of Corporate Development and Investor Relations, Cactus: I wanted to ask about that new.

Scott Bender, Chairman and Chief Executive Officer, Cactus: wellhead system that you guys were about to introduce kind of six to twelve months ago, and then the market started softening. Where do you stand with that now? Seems like we’re finding some potential stability in the market. We’ll see where oil prices go. You got your Pressure Control margins back up. You’ve kind of worked through the tariff issue. Just give us your latest thoughts on introducing that new system in 2026 or whether that’s going to be delayed further. Yep. I can answer that question, Scott. Q1. Oh, great. Easy answer, very quick. Appreciate it, Scott. I’ll turn it back.

Alan Boyd, Director of Corporate Development and Investor Relations, Cactus: Thank you. Our next question comes from Stephen Gengaro of Stifel. Your line is now open.

Scott Bender, Chairman and Chief Executive Officer, Cactus: Hey, Steven, how are you? Good, thanks. Good morning. Thanks for taking the questions. I think two for me and one follows up a little bit on Scott’s question, I think, and you can correct me if I’m wrong, but I think last quarter you alluded to it being harder to support margins with the tariffs. It sounded like part of that was because of lower customer activity. It seems like that tone has changed a bit and the results were clearly very good. Can you comment on that at all? Yeah, because, you know, Stephen, just to remind you, what happened to us in the previous quarter is that the tariff rates changed very unexpectedly in, I think it was May or early June when the section 232 moved from 25% to 50%. We frankly had not anticipated that and received no indication that that was the case.

As a result, it made it very difficult for us to make a case to suppliers, customers not knowing where we were going to land. We have greater clarity on that which helps us to address our suppliers and our customers. I would think it’s more about the increased tariff environment than it is about activity levels. That said, we’ve been very pleasantly surprised with how our particular customer base has held up. I want to emphasize, Stephen, that our expectations are that those customers with holdings in the core areas of our basins, because our customers are the larger publicly held E&P’s, that we expect that to hold up relative to the rest of the market.

Alan Boyd, Director of Corporate Development and Investor Relations, Cactus: Great, thanks.

Scott Bender, Chairman and Chief Executive Officer, Cactus: The follow up to that was, without asking about market share, when you think about pressure control and you think about activity levels, you’ve been outperforming that. Right. I would imagine as we go forward here, notwithstanding how the rate count evolves, you’ll continue to outperform that, driven just primarily by the stability of your customers. Is that fair? As we think about, and I’m thinking that’s like a North America comment. Yeah. As I mentioned, we’re not getting a whole lot of clarity in terms of next year. I think it’s also fair to say that our market share is going to be a function of new names and we’re seeing some increased interest from some significant players. I believe that’s going to continue. I’m guardedly optimistic that we’ll be able to defend and potentially expand it. The question is how big is that pie going to be?

I can’t estimate that for you. I just think that our pie is going to be significantly larger than some of our competitors. I would also say that we’ve seen some very large competitors try to increase market share during this period of anemic growth, frankly at the expense of their margins. I can’t control that. Right, good. No, that’s good color. I appreciate it.

Alan Boyd, Director of Corporate Development and Investor Relations, Cactus: Thank you. Our next question comes from Arun Jayaram from J.P. Morgan Securities. Your line is open.

Scott Bender, Chairman and Chief Executive Officer, Cactus: Yeah, good morning gentlemen. I wondered if you could provide any updated perspective on the Cactus SPC transaction which you indicated you expect to close in early 2026. How is the integration planning going? Any updated views would be much appreciated because that is an important swing factor as we think about your earnings power next year specifically. What are you asking me? Yeah, just your thoughts on kind of the earnings power of that segment next year. Obviously there’s been some cross currents in Saudi, although we were on the neighbors call yesterday and Tony mentioned how there could be an improvement in activity as you got into the back half of or second half of 2026. I was wondering if you’ve been to the Middle East recently and just could offer any kind of data points or fresh perspective.

Like I said, there’s just been some cross currents as we think about potential spending trends next year. I was there about two weeks ago. I think the Saudis are probably projecting the possibility of increased activity in 2H26. That hasn’t translated into orders and those are just facts. The international market, typically when we have a slowdown in the U.S. you normally see about a 12 month lag in the international market. I expect the international market, even the Middle East, to have a relatively weaker 2026 than in 2025. There is no concrete objective evidence which would only be manifested by order placements. I just can’t be terribly optimistic about the minis to just, you know, rent is going to be in the low 60s, and that’s got to somehow translate into reduced activity. What we are seeing is some U.S.

companies becoming more active in the Middle East. I think that’s really good for us because they happen to be our customers. There is an absolute undeniable focus on unconventional drilling. They really are welcoming Western companies. As a result, the Western companies bring in the suppliers with whom they’re most comfortable. I feel good about that. Will that offset the overall decline? Not likely, but it’ll mitigate the impact. Great, that’s helpful. Really appreciate that perspective. Maybe just my follow up, maybe give us an update on your sourcing plans internationally. How is the ramp going in Vietnam? Maybe just some thoughts on that. Yeah, I can defer to Joel on that. He’s in the room with us. Vietnam is progressing well. Joel, I’ll let you handle this. It’s progressing well. We’re starting to move some of the wellhead into the U.S.

that we need to be able to assemble and monogram. We’re currently in line with API to get our audit to be monogrammed. We filled the paperwork out, we submitted all the required additional documentation. We’re expecting to have that audit in the next, hopefully in the next 90 or so days. We’ll have that done after the first of the year. One of our requirements is to be able to provide API monogram equipment from that facility. In the interim, we have started to move wellhead housings and tubing head bodies into the U.S. that will do the assembly at our Bossier City facility. It’s progressing well, expanding, adding headcount, adding fixtures for testing. Pretty pleased with the progress. Any sense, once you do get API certification, what kind of mix Vietnam can have? Perhaps next year we’re going to focus primarily on the wellhead out of there.

Towards the end of the year, we’ll start bringing some of our gate valves. The primary focus for the beginning of the year and the year will be getting as many of the wellheads in the 2000 assemblies. I would say somewhere in the magnitude of at least half. Oh, wow. Okay, got it. Thanks, gentlemen.

Alan Boyd, Director of Corporate Development and Investor Relations, Cactus: Thank you. Our next question comes from Don Crist of Johnson Rice. Your line is open.

Scott Bender, Chairman and Chief Executive Officer, Cactus: Good morning. Good morning, guys. Good morning. Thanks for letting me in, Scott. I just wanted to ask one question on kind of the macro front. I mean, we’re hearing a lot more chatter about unconventional drilling in many different countries around the world. Obviously, there’s a lot more activity kind of moving that direction. I just wanted to know from your standpoint, what do you think the timeframe would be to kind of see a material pickup in unconventional around the world, whether it be in Turkey or Libya or any of the places that aren’t big today in unconventional. It’s just kind of timeframe perspective because nobody seems to give that number out. I can tell you this with absolute certainty that we’ve seen an exponential increase in unconventional requests throughout the Middle East.

I’m less optimistic about Argentina, frankly, because there’s just not that many rigs running in comparison to the Middle East. A lot of interest in Saudi, a lot of interest in Abu Dhabi. I would probably tell you that by the end of 2026, we’re going to see, in fact, I think we have our first unconventional shipment, Joel, scheduled for when it’s probably going to go January. Yeah. It’s basically a U.S. product. I don’t anticipate obviously any issues with that. I think we’ll see a steady ramp up. Their real interest right now is to compare the results of using an unconventionally, a design specifically addressing unconventional with what they’re using in terms of flanged equipment. This will be pending the results of the time savings.

If the time savings are anything at all approaching the U.S., I think that, you know, once word spreads and it spreads quickly, I think you’re going to see a serious ramp up. Let’s call it fourth quarter because they need time to drill these wells and analyze the efficiencies. I can tell you my gut feeling is 2027 will be a significant contributor. I think that by 4Q26, we’re going to see some meaningful shipments. I appreciate the color. You’re always good at the macro stuff. Thank you. Thank you.

Alan Boyd, Director of Corporate Development and Investor Relations, Cactus: Thank you. I am showing no further questions at this time. I would now like to turn it back over to the Chairman and CEO Scott Bender for closing remarks.

Scott Bender, Chairman and Chief Executive Officer, Cactus: All right. I want to thank everybody for their continued interest in the company, and I’m really pleased with this team’s efforts in terms of dealing with an anemic market in a very uncertain tariff landscape. This really is a reflection of not only how flexible our team is, but also the fact that we are and will always be heavily invested in consumables and variable cost businesses. Thanks again for your interest. Have a good day.

Alan Boyd, Director of Corporate Development and Investor Relations, Cactus: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.

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