10-Q: Cactus, Inc. Q1 2026 Financial Results

Cactus, Inc. reports Q1 2026 financial results, highlighting the impact of the Cactus International acquisition and regional geopolitical challenges.

Summary

• Reported total revenues of $388.3 million for Q1 2026, compared to $280.3 million in Q1 2025.
• Net income attributable to Cactus, Inc. was $32.9 million, impacted by an $81.5 million accretion of redeemable non-controlling interest.
• Operating income was $49.5 million, down from $68.6 million in the prior year period.
• Completed the acquisition of 65% of Baker Hughes Pressure Control LLC (Cactus International) for $344.5 million on January 1, 2026.
• Diluted loss per Class A share was $0.70 for the quarter.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral-to-cautious report; while the acquisition of Cactus International is a strategic positive, the immediate financial impact, combined with significant geopolitical risks in the Middle East, creates near-term uncertainty.

Positives

• Revenue growth of 38.5% year-over-year, driven by the Cactus International acquisition.
• Strong operating cash flow of $128.3 million for the quarter.
• Successful integration of the Cactus International business, which contributed $126.9 million in revenue during the quarter.
• Maintained a strong liquidity position with $291.6 million in cash and cash equivalents.

Negatives

• Operating income declined 27.8% year-over-year to $49.5 million.
• Reported a net loss attributable to Cactus, Inc. of $48.6 million when including the accretion of redeemable non-controlling interest.
• Increased selling, general, and administrative expenses due to transaction and integration costs related to the Baker Hughes acquisition.
• Pressure Control segment operating income decreased 28.9% compared to Q1 2025 due to purchase accounting impacts and higher tariff-related costs.

Risks

• Ongoing conflict between Iran, the United States, and Israel is disrupting operations in the Middle East and impacting supply chains.
• Potential for continued volatility in global oil and gas prices affecting customer activity levels.
• Uncertainty regarding the outcome of patent litigation with Cameron International Corporation.
• Exposure to elevated tariff expenses on goods imported from Vietnam and China.
• Risks associated with the integration of the Cactus International business and achieving expected synergies.

Future Outlook

The company expects existing cash, cash flows from operations, and available credit facilities to be sufficient to meet material cash requirements for the next 12 months. Capital expenditures for 2026 are estimated to range between $40 million and $50 million.

Management Comments

• Management continues to prioritize the safety of personnel in the Middle East region amid ongoing conflict.
• The company is actively working on integrating the Cactus International business and implementing financial reporting controls.
• Management notes that the acquisition of Cactus International enhances operational capabilities and geographic footprint.

Industry Context

StockSavvy.ai notes that Cactus, Inc. is navigating a complex geopolitical environment in the Middle East while simultaneously integrating a major acquisition. The company's performance reflects the broader industry trend of capital discipline among E&P operators, balanced against the expansion of international service capabilities.

Comparison to Industry Standards

• The company's focus on wellhead and spoolable pipe technologies aligns with major oilfield service providers like SLB and Baker Hughes.
• The use of a Tax Receivable Agreement (TRA) is a common structure for companies that went public via an Up-C structure.
• The company's leverage ratio remains conservative with no bank debt outstanding as of the end of the quarter.

Corporate Governance

Legal Proceedings

• Ongoing patent infringement litigation with Cameron International Corporation regarding frac operations.

Stakeholder Impact

• Shareholders may be impacted by the volatility associated with the Middle East conflict and the integration of the new acquisition.
• Employees in the Middle East face safety concerns due to regional conflict.
• Customers in the Middle East may experience service disruptions.

Next Steps

• Continue integration of Cactus International operations.
• Monitor and manage risks associated with Middle East operations.
• Continue to evaluate the impact of Pillar Two global tax framework.
• Pursue potential tariff refunds following the U.S. Supreme Court ruling.

Key Dates

Recommendation

The stock is a hold due to the strategic value of the recent acquisition being offset by significant geopolitical risks and the current earnings pressure from purchase accounting and integration costs.

Keywords

Cactus Inc, WHD, Pressure Control, Spoolable Technologies, Oil and Gas Equipment, Baker Hughes Transaction, Wellhead, FlexSteel