OCEANEERING INTERNATIONAL INC Q1 FY2025 earnings call

• First quarter net income was $50.4 million ($0.49 per share), a 233% Y/Y increase. Consolidated revenue was $675 million, up 13% Y/Y.
• SSR and OPG were key drivers of results; SSR EBITDA margin improved to 35% from 31%.
• OPG benefited from international projects commencing in Q4 2024 and improved vessel activity.
• AdTech was awarded the largest initial contract value in company history, foundational to operating income growth in 2025.
• Order intake for Q1 2025 was approximately $1.2 billion, and backlog improved from the prior year.

For the first quarter, consolidated revenue was $675 million, up 13% Y/Y. Subsea Robotics (SSR) saw an 8% increase in average ROV revenue per day utilized, 4% increase in days utilized, leading to a 25% increase in segment EBITDA. Revenue split: 79% from ROV business, 21% from tooling and survey. Fleet utilization was 67%, with 62% for drill support and 38% for vessel-based activity. Offshore Projects Group (OPG) had a 43% revenue increase, driven by favorable service mix, improved vessel activity, and lower drydock costs. Manufactured products had a 4% Y/Y revenue increase but operating income declined due to a $10.4 million inventory reserve. Integrity Management and Digital Solutions (IMDS) had flat revenue and operating income. Aerospace and Defense Technologies (AdTech) had slight declines in operating income and margin due to readiness costs for a large contract award.

• Full year 2025 EBITDA guidance remains $380 million to $430 million.
• SSR: EBITDA margin projected in mid-thirty percent range for full year, ROV utilization expected in high 60% to low 70% range, drill support market share to stay 55%-60%.
• Manufactured products: Significantly improved operating income with better margins and increased revenue based on backlog.
• OPG: Operating income margin expected in mid-teens range, with improved vessel utilization in Gulf of Mexico, West Africa, Brazil, and Asia Pacific.
• IMDS: Significantly improved results with operating income margin in mid to high single-digit range, aided by GDI acquisition.
• AdTech: Operating results to improve significantly due to DoD contract, operating income margin in low teens range.

• Geopolitical uncertainties, including tariffs, regulatory changes, and OPEC+ production impacts, which have generated concerns in the energy sector and are accounted for in guidance.

Q: David Smith asked about GDI and ROV mix in the first quarter.

A: Roderick Larson said GDI allows underwater inspection with ROVs, and in Q1, ROV mix was 62% drill support, 38% vessel-based.

Q: David Smith asked about ROV activity mix for the full year outlook.

A: Roderick Larson said it's due to larger construction vessels active in energy and wind, and OPG activity driving vessel and tooling demand.

Q: Eddie Kim asked about confidence in second half activity and impact of oil prices below $60.

A: Roderick Larson said confidence comes from backlog and customer relationships; SSR and OPG may be first affected if cuts occur. Alan Curtis added ROV day rate projected to have 5%-10% increase, expecting to touch $11,000/day.

Q: Colby Sasso asked about ROV business growth beyond 2025.

A: Roderick Larson said it depends on vessel activity, customer long-term plans, and GDI integration, with no immediate protracted downturn seen in 2025