TETRA TECHNOLOGIES INC Q1 FY2025 earnings call

• Deepwater activity saw a 60% year-over-year increase in offshore deepwater operations, with 24 deepwater projects in Q1 2025 vs. 15 in Q1 2024.
• Anticipate full benefit of European industrial chemicals seasonal peak in Q2, with first well from Brazil deepwater project and completion of CS Neptune project.
• Commercial launch of TETRA Oasis TDS for desalination of produced water, with collaboration with EOG Resources and growing regulatory support.
• Positioned to benefit from Eos Z3 utility energy storage systems' growth, with zinc bromide electrolyte usage increasing.
• Arkansas Evergreen Brine Production Unit saw AOGC approval for expansion, test well results were promising, and plans to drill first production well with an option agreement with SWA Lithium for lithium.

Completion Fluids and Products: First quarter revenue was $93 million, up 35% sequentially. Adjusted EBITDA was $33.2 million, up 77% sequentially, with margins at 35.7% (up from 27.3% in Q4). Water and Flowback Services: Revenue was $64 million, down 2% sequentially but up 13% year-over-year. Adjusted EBITDA was $8.3 million, up $1.2 million year-over-year. Margins were 13%, down slightly q-o-q but up 340 basis points y-o-y. The segment is focusing on automation and has 100% utilization of automated units, with plans to prioritize CapEx for further automation.

• Moved up the lower end of first half 2025 adjusted EBITDA guidance to $57 million to $65 million (previously $55 million to $65 million).
• Expect full benefit of European industrial chemicals seasonal peak in Q2, first well from Brazil deepwater project, and completion of CS Neptune project.
• Base business free cash flow expected to be in excess of $50 million, funding emerging growth initiatives without equity dilution or debt draw.

• Uncertainty in U.S. land activity due to oil price environment.
• Lumpy nature of deepwater business depending on well completion timing.
• Market and regulatory uncertainties affecting desalination and energy storage initiatives.

Q: Concerns on holdups for Oasis commercial pilot A: Customers need comfort with technology and evolving regulations; timeline could accelerate with more commercial discussions Q: Desalination pilot customer selection A: Treat all current customers equally, with capacity to run multiple pilots Q: Water and Flowback margins and automation A: More benefits from automation, with focus on further automating fleet and improving margins in intermediate/long-term Q: Deepwater market outlook A: No real change to 2025 projects, but potential delays if oil prices stay low longer