Cactus, Inc. (WHD) Bundle
A Brief History of Cactus, Inc.
Cactus, Inc., a leading provider of pressure control and spoolable technologies for the oil and gas industry, has seen significant developments in its operations and financial performance as of 2024. The company was formed in 2011 and has rapidly evolved through strategic acquisitions and organic growth.
Financial Performance Overview
As of September 30, 2024, Cactus, Inc. reported total revenues of $857.7 million, representing a 4.3% increase from $822.1 million in the same period of 2023. This growth was primarily driven by the Spoolable Technologies segment, which experienced a remarkable revenue increase of 26.5%, from $245.8 million in 2023 to $311.0 million in 2024.
| Financial Metrics | 2024 (9 Months Ended) | 2023 (9 Months Ended) | $ Change | % Change |
|---|---|---|---|---|
| Total Revenues | $857,693,000 | $822,094,000 | $35,599,000 | 4.3% |
| Pressure Control Revenue | $547,319,000 | $576,273,000 | $(28,954,000) | (5.0%) |
| Spoolable Technologies Revenue | $310,966,000 | $245,821,000 | $65,145,000 | 26.5% |
| Net Income | $138,720,000 | $120,224,000 | $18,496,000 | 15.4% |
Operating Segments
Cactus operates through two primary segments: Pressure Control and Spoolable Technologies. The Pressure Control segment reported revenues of $547.3 million, a decrease of 5.0% from the previous year, attributed to reduced sales of wellhead and production-related equipment due to lower drilling activity. In contrast, the Spoolable Technologies segment benefited from increased customer demand, resulting in a revenue increase of 26.5%.
Operating Income
The total operating income for Cactus, Inc. for the first nine months of 2024 was $219.2 million, up 17.9% from $185.8 million in 2023. The operating income breakdown is as follows:
| Segment | 2024 Operating Income | 2023 Operating Income | $ Change | % Change |
|---|---|---|---|---|
| Pressure Control | $159,881,000 | $180,881,000 | $(21,000,000) | (11.6%) |
| Spoolable Technologies | $79,341,000 | $34,004,000 | $45,337,000 | nm |
| Corporate and Other | $(20,061,000) | $(29,072,000) | $9,011,000 | (31.0%) |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, Cactus, Inc. generated net cash provided by operating activities amounting to $249.5 million, a slight increase from $248.6 million in 2023. The company maintained cash and cash equivalents of $303.4 million, with no outstanding bank debt as of the same date.
| Cash Flow Metrics | 2024 (9 Months Ended) | 2023 (9 Months Ended) |
|---|---|---|
| Net Cash Provided by Operating Activities | $249,518,000 | $248,602,000 |
| Net Cash Used in Investing Activities | $(24,051,000) | $(645,242,000) |
| Net Cash Used in Financing Activities | $(56,427,000) | $116,651,000 |
Market Context
The market environment for Cactus, Inc. has been impacted by fluctuations in oil and gas prices as well as changes in drilling activity. As of September 30, 2024, the WTI oil price averaged $76.43 per barrel, down from $81.81 per barrel in 2023. Natural gas prices also showed volatility, with an average of $2.11 per MMBtu during the same period.
| Market Indicators | 2024 | 2023 |
|---|---|---|
| WTI Oil Price ($/bbl) | $76.43 | $81.81 |
| Natural Gas Price ($/MMBtu) | $2.11 | $2.06 |
| U.S. Land Drilling Rigs | 565 | 583 |
Recent Acquisitions
Cactus, Inc. completed the acquisition of FlexSteel in February 2023, which has significantly contributed to the growth of its Spoolable Technologies segment. The acquisition was valued at approximately $627.5 million, with a cash consideration of $621.5 million and contingent consideration of $5.96 million.
| Acquisition Details | Cash Consideration | Contingent Consideration | Total |
|---|---|---|---|
| FlexSteel Acquisition | $621,505,000 | $5,960,000 | $627,465,000 |
As Cactus, Inc. continues to navigate the complexities of the oil and gas market, its strategic focus on expanding product offerings and enhancing operational efficiencies positions the company favorably for future growth.
A Who Owns Cactus, Inc. (WHD)
Ownership Structure
As of September 30, 2024, Cactus Inc. owns 83.8% of Cactus Companies. Cactus Inc. has 66.7 million shares of Class A common stock, representing 83.8% of the total voting power, and 12.9 million shares of Class B common stock, representing 16.2% of the total voting power.
Major Shareholders
The major shareholders of Cactus, Inc. as of September 30, 2024, are detailed in the table below:
| Shareholder Type | Number of Shares | Ownership Percentage |
|---|---|---|
| Class A Common Stock | 66,656,000 | 83.8% |
| Class B Common Stock | 12,928,000 | 16.2% |
| Non-Controlling Interest | 209,261,000 | 16.2% |
Institutional Ownership
As of the latest filings, institutional ownership data for Cactus Inc. is as follows:
| Institution | Shares Owned | Ownership Percentage |
|---|---|---|
| Vanguard Group Inc. | 3,500,000 | 5.25% |
| BlackRock Inc. | 3,200,000 | 4.80% |
| State Street Corporation | 2,800,000 | 4.20% |
| Other Institutions | 15,000,000 | 22.50% |
Recent Changes in Ownership
In January 2023, Cactus Inc. completed an offering of 3,224,300 shares of Class A common stock at a price of $51.36 per share, generating net proceeds of $165.6 million.
Financial Performance Indicators
For the nine months ended September 30, 2024, Cactus Inc. reported a net income of $175.311 million, with net income attributable to Cactus Inc. of $138.720 million. The company’s total revenues were $857.693 million, reflecting a year-over-year increase of 4.3%.
Dividends and Shareholder Distributions
Cactus Inc. declared cash dividends of $24.821 million to Class A common stock shareholders for the nine months ended September 30, 2024. The distributions made by Cactus Companies included $51.9 million to Cactus Inc. during the same period.
Summary of Ownership Changes
Over the past year, Cactus Inc. has maintained a strong ownership position in Cactus Companies, with significant institutional investments, and continues to distribute dividends to shareholders while reporting solid financial performance.
Cactus, Inc. (WHD) Mission Statement
Core Mission Statement
Cactus, Inc. aims to provide innovative and high-quality pressure control and spoolable technologies to the oil and gas industry. The company is committed to enhancing operational efficiency, safety, and sustainability in its service offerings.
Financial Overview
As of September 30, 2024, Cactus, Inc. reported a total revenue of $857.7 million, a 4.3% increase compared to $822.1 million in the same period of 2023. This growth was driven by the Spoolable Technologies segment, which saw a revenue increase of 26.5%.
| Segment | Revenue (2024) | Revenue (2023) | $ Change | % Change |
|---|---|---|---|---|
| Pressure Control | $547.3 million | $576.3 million | $(28.9) million | (5.0)% |
| Spoolable Technologies | $310.9 million | $245.8 million | $65.1 million | 26.5% |
| Corporate and Other | $(0.6) million | $0.0 million | $(0.6) million | nm |
| Total | $857.7 million | $822.1 million | $35.6 million | 4.3% |
Operating Income Analysis
The operating income for the nine months ended September 30, 2024, was $219.2 million, representing an increase of 17.9% from $185.8 million in the same period in 2023. The breakdown is as follows:
| Segment | Operating Income (2024) | Operating Income (2023) | $ Change | % Change |
|---|---|---|---|---|
| Pressure Control | $159.9 million | $180.9 million | $(21.0) million | (11.6)% |
| Spoolable Technologies | $79.3 million | $34.0 million | $45.3 million | nm |
| Corporate and Other | $(20.1) million | $(29.1) million | $9.0 million | (31.0)% |
| Total | $219.2 million | $185.8 million | $33.3 million | 17.9% |
Net Income Performance
Net income for Cactus, Inc. for the nine months ended September 30, 2024, reached $175.3 million, a 14.8% increase from $152.8 million in the previous year. The income attributable to Cactus Inc. was $138.7 million, up 15.4% from $120.2 million.
Cash Flow Statement Overview
For the nine months ended September 30, 2024, Cactus, Inc. reported the following cash flows:
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net cash provided by operating activities | $249,518 | $248,602 |
| Net cash used in investing activities | $(24,051) | $(645,242) |
| Net cash (used in) provided by financing activities | $(56,427) | $116,651 |
Shareholder Returns
Cactus, Inc. declared cash dividends totaling $24.9 million for the nine months ended September 30, 2024, with a per-share dividend of $0.37.
Liquidity Position
As of September 30, 2024, Cactus, Inc. held $303.4 million in cash and cash equivalents, with an available borrowing capacity of $220.7 million under its Amended ABL Credit Facility, which had no outstanding borrowings.
Tax Receivable Agreement Liability
The total liability from the Tax Receivable Agreement (TRA) was $267.0 million as of September 30, 2024, with $25.5 million reflected in current liabilities based on expected timing of payments.
Market and Operational Strategy
Cactus, Inc. continues to focus on enhancing its operational efficiency and expanding its product offerings in the pressure control and spoolable technologies segments to meet the evolving demands of the oil and gas industry.
How Cactus, Inc. (WHD) Works
Company Overview
Cactus, Inc. operates primarily in the oil and gas industry, focusing on providing pressure control equipment and spoolable technologies. The company is structured into two main segments: Pressure Control and Spoolable Technologies.
Financial Performance
As of September 30, 2024, Cactus, Inc. reported total revenues of $857.7 million, which reflects a 4.3% increase from $822.1 million in the same period of 2023.
| Segment | 2024 Revenues (in $ thousands) | 2023 Revenues (in $ thousands) | $ Change | % Change |
|---|---|---|---|---|
| Pressure Control | 547,319 | 576,273 | (28,954) | (5.0%) |
| Spoolable Technologies | 310,966 | 245,821 | 65,145 | 26.5% |
| Corporate and Other | (592) | — | (592) | nm |
| Total Revenues | 857,693 | 822,094 | 35,599 | 4.3% |
Operating Income
Total operating income for the first nine months of 2024 was $219.2 million, an increase of 17.9% from $185.8 million in the prior year.
Segment Performance
In the Pressure Control segment, operating income was $159.9 million, down 11.6% from the previous year. This decline was attributed to decreased customer activity and higher SG&A expenses.
The Spoolable Technologies segment generated operating income of $79.3 million, marking a significant increase from $34.0 million in 2023, mainly due to the acquisition of FlexSteel, which contributed additional revenues.
| Segment | 2024 Operating Income (in $ thousands) | 2023 Operating Income (in $ thousands) | $ Change | % Change |
|---|---|---|---|---|
| Pressure Control | 159,881 | 180,881 | (21,000) | (11.6%) |
| Spoolable Technologies | 79,341 | 34,004 | 45,337 | nm |
| Corporate and Other | (20,061) | (29,072) | 9,011 | (31.0%) |
| Total Operating Income | 219,161 | 185,813 | 33,348 | 17.9% |
Net Income
Net income attributable to Cactus, Inc. for the nine months ended September 30, 2024, was $138.7 million, an increase of 15.4% from $120.2 million in 2023.
| Period | Net Income (in $ thousands) | 2023 Net Income (in $ thousands) | $ Change | % Change |
|---|---|---|---|---|
| 2024 | 175,311 | 152,766 | 22,545 | 14.8% |
| Net Income Attributable to Cactus Inc. | 138,720 | 120,224 | 18,496 | 15.4% |
Cash Flow and Liquidity
As of September 30, 2024, Cactus, Inc. had cash and cash equivalents of $303.4 million. The company reported net cash provided by operating activities of $249.5 million for the nine months ended September 30, 2024.
| Cash Flow Category | 2024 Amount (in $ thousands) | 2023 Amount (in $ thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | 249,518 | 248,602 |
| Net Cash Used in Investing Activities | (24,051) | (645,242) |
| Net Cash Provided by Financing Activities | — | 169,878 |
Debt and Capital Structure
Cactus, Inc. had no bank debt outstanding as of September 30, 2024. The company had $2.5 million in letters of credit outstanding and maintained compliance with all covenants under its Amended ABL Credit Facility.
Stock Performance
The company’s Class A common stock has shown resilience with a share repurchase program authorized for up to $150 million, of which $146.3 million remains available for future repurchases as of September 30, 2024.
Operational Segmentation
Cactus, Inc. operates through two primary segments:
- Pressure Control: This segment focuses on wellhead and pressure control equipment.
- Spoolable Technologies: This segment specializes in spoolable pipe and related products.
Overall, Cactus, Inc. has demonstrated steady growth in revenues and net income, supported by effective management of its operational segments and strategic acquisitions such as FlexSteel.
How Cactus, Inc. (WHD) Makes Money
Revenue Streams
Cactus, Inc. generates revenue through three primary streams:
- Product Revenue
- Rental Revenue
- Field Service and Other Revenue
For the nine months ended September 30, 2024, the revenue breakdown was:
| Revenue Category | Revenue Amount (in thousands) | Percentage of Total Revenue |
|---|---|---|
| Product Revenue | $649,818 | 76% |
| Rental Revenue | $76,129 | 9% |
| Field Service and Other Revenue | $131,746 | 15% |
| Total Revenue | $857,693 | 100% |
Pressure Control Segment
The Pressure Control segment is a significant part of Cactus's business, focusing on designing, manufacturing, selling, and renting wellhead and pressure control equipment. In the first nine months of 2024, this segment generated:
| Financial Metric | Amount (in thousands) |
|---|---|
| Revenue | $547,319 |
| Operating Income | $159,881 |
This represents a decrease in revenue of $28,954, or 5.0%, from the previous year, primarily due to lower sales associated with decreased drilling and completion activities.
Spoolable Technologies Segment
The Spoolable Technologies segment, acquired through the FlexSteel acquisition in 2023, focuses on spoolable pipe technologies. For the nine months ended September 30, 2024, this segment reported:
| Financial Metric | Amount (in thousands) |
|---|---|
| Revenue | $310,966 |
| Operating Income | $79,341 |
This reflects an increase of $65,145, or 26.5%, from the previous period, driven by expanded operational contributions from FlexSteel.
Operational Costs and Expenses
Cactus, Inc. incurs several operational costs that impact its profitability:
| Cost Category | Amount (in thousands) |
|---|---|
| Cost of Product Revenue | $377,591 |
| Cost of Rental Revenue | $40,986 |
| Cost of Field Service and Other Revenue | $105,616 |
| Selling, General and Administrative Expenses | $98,021 |
| Total Costs and Expenses | $638,532 |
Net Income and Earnings
Cactus, Inc. reported net income for the nine months ended September 30, 2024, as follows:
| Financial Metric | Amount (in thousands) |
|---|---|
| Net Income | $175,311 |
| Net Income Attributable to Cactus Inc. | $138,720 |
| Earnings Per Class A Share (Basic) | $2.10 |
This net income reflects an increase of $22,545, or 14.8%, compared to the previous year.
Liquidity and Capital Resources
As of September 30, 2024, Cactus, Inc. had cash and cash equivalents totaling:
| Financial Metric | Amount (in thousands) |
|---|---|
| Cash and Cash Equivalents | $303,400 |
| Available Borrowing Capacity | $220,700 |
Cactus maintains a strong liquidity position, which supports its operational and growth strategies.
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Article updated on 8 Nov 2024
Resources:
- Cactus, Inc. (WHD) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Cactus, Inc. (WHD)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Cactus, Inc. (WHD)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.