Q2 2026 Tetra Technologies Inc Earnings Call Transcript
Key Points
- Delivered one of the best second quarters and first-half financial results in the past decade, with revenue up 19% sequentially and 7% year-over-year to $185.7 million.
- International and global offshore revenues hit 10-year highs for both the second quarter and first half of 2026, with international revenue up 24% year-over-year.
- Launched TETRA Neptune Z-Lite, a high-value deepwater completion fluid that reduces zinc content, and secured a Beacon offshore contract for a 20,000 psi Gulf of America program.
- Approved final investment decision for the Arkansas bromine project, funded by a $108 million equity offering, which will lower bromine costs and enhance supply security by early 2028.
- Water and flowback services revenue grew 12% sequentially and 13% year-over-year, with record second-quarter revenue in Argentina, and adjusted EBITDA margin improved to 14.8%.
- Strengthened intellectual property for Tetra Oasis TDS desalination with new patent allowances, and advanced engineering for a 100,000-barrel-per-day plant, attracting hyperscaler interest.
- Tetra PureFlow Zinc Bromide electrolyte demand accelerated, supported by EOS's progress toward 4 GWh capacity and growing customer backlog.
- Net leverage improved to 0.4x, with cash and cash equivalents of $154.6 million and total debt of $183.3 million after the equity offering.
- Adjusted EBITDA declined year-over-year to $31.9 million from $36.2 million, due to the non-repeat of a three-well Tetra Neptune project in Q2 2025.
- Middle East conflict caused delays in fluid shipments to the region, introducing unpredictability and uncertainty in the business outlook.
- Increased cost of third-party bromine negatively impacted margins in the completion fluids segment, with adjusted EBITDA margin down to 26.4% from historical levels.
- Gulf of America deepwater activity was down year-over-year due to a heavy drilling cycle rather than completions, with recovery expected only in 2027.
- Permitting for produced water discharge by TCEQ remains a potential gating item for finalizing Oasis desalination projects.
- The company faces a one-year bridge until the Arkansas bromine plant is operational, requiring continued reliance on higher-cost third-party bromine.
- US frac activity declined year-over-year, though Tetra's water and flowback business outperformed the market.
Hello and thank you for standing by. My name is Dennis and I will be your conference operator today.
At this time, I would like to welcome everyone to the Tektra Technologies Inc. Second Quarter 2026 Earnings Results Conference Call.
All lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be a question-and-answer session.
If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad.
If you would like to withdraw your question, press star one again.
I would now like to turn the conference over to Kurt Hallett, Treasurer and Investor Relations. Please go ahead.
Thank you, Dennis, and good morning, everyone, and thank you for joining Tetra's second quarter earnings call.
The speakers on today's call will be Brady Murphy, President and CEO and Matt Sanderson, Chief Financial Officer.
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