What Tetra Technologies (TTI) Said on Its Q3 Earnings Call

Key Points

• Third-quarter revenue rose 10% to $168 million, the highest third-quarter level in a decade. Adjusted EBITDA was flat at $25.1 million, while adjusted earnings increased to $0.06 per share from $0.04 a year earlier.
• Growth came from industrial chemicals and water and flowback services: industrial chemicals revenue increased 32%, while water and flowback revenue rose 21% and adjusted EBITDA climbed 69%. International markets contributed $68.8 million, or 41% of consolidated revenue, led by Argentina.
• Tetra expects continued growth, forecasting fourth-quarter revenue and adjusted EBITDA to increase by double digits year over year and both metrics to grow in 2027. Its Arkansas bromine project remains on schedule and on budget, with first production expected in early 2028.

Tetra Technologies NYSE: TTI reported third-quarter 2026 revenue of $168 million, up 10% from a year earlier and the company’s highest third-quarter revenue level in a decade, as international activity, industrial chemicals and production testing growth offset lower deepwater completion activity in the Gulf of America.

Adjusted EBITDA was $25.1 million, flat year over year and the company’s second-highest third-quarter result in the past 10 years. Income from continuing operations totaled $6.8 million, or $0.05 per share, compared with $4.2 million, or $0.03 per share, in the prior-year quarter. Adjusted earnings were $0.06 per share, compared with $0.04 a year earlier.

“Our third quarter was highlighted by some really exceptional performances across a broad range of our company’s geographies and product lines,” President and CEO Brady Murphy said, citing continued international expansion, industrial chemical growth and progress on the company’s Arkansas bromine project.

Industrial Chemicals and Production Testing Drive Growth

Completion fluids and products revenue was $91.9 million, up 2% year over year and the segment’s highest third-quarter revenue in a decade. The segment generated adjusted EBITDA of $20.3 million, representing a 22.1% margin.

Murphy said results were affected by reduced deepwater activity in the Gulf of America, where customers were in a drilling-heavy period with fewer well completions. CFO Matt Sanderson said higher shipping costs associated with the final deliveries under a Middle East contract also weighed on margins. The company expects full-year completion fluids and products margins to reach the lower end of its 25% to 30% guidance range.

Industrial chemicals revenue increased 32% from a year earlier and represented more than half of completion fluids and products segment revenue for the first time. Sales tied to semiconductor manufacturing rose 48% year over year, driven by calcium chloride used in wastewater treatment, according to management. Murphy said the semiconductor-related business remains less than 5% of the company’s North American chemicals business but has a sustainable growth outlook as additional semiconductor plants come online.

Water and flowback services revenue rose 21% year over year to $76.1 million. Adjusted EBITDA increased 69% to $12.7 million, while the segment’s adjusted EBITDA margin expanded 480 basis points to 16.7%.

Production testing revenue grew 9% sequentially and 60% from a year earlier, supported by market-share gains for the company’s auto SandStorm technology in the U.S. and international growth. International revenue accounted for 33% of water and flowback services revenue, compared with 15% for all of 2025, Sanderson said.

Murphy highlighted the launch of Echo SandStorm, a non-intrusive technology designed to provide real-time sand measurements during flowback operations. In field operations, the technology reduced sand-dumping cycles by 92%, he said. A program with an Appalachian operator also demonstrated a 95% reduction in methane emissions.

International Expansion and Deepwater Outlook

International revenue reached $68.8 million, or 41% of consolidated revenue, led by Argentina as early production facilities ramped and SandStorm utilization increased in the Vaca Muerta formation. Murphy said Tetra expects double-digit growth in Argentina during 2027, though not another doubling of the business.

The company also sees growth potential in Middle East unconventional operations, where it expects auto SandStorm and Echo SandStorm technologies to gain traction. Murphy said Tetra anticipates continued growth across international markets in 2027.

Management expects Gulf of America completion activity to increase later in 2026 and continue into 2027. Murphy said the company expects completion fluids revenue and EBITDA to rise in 2027, supported by activity in the U.S. Gulf, Norway, West Africa and the Mediterranean.

Tetra plans to execute the first of three Neptune Z-Lite wells in the fourth quarter. Murphy described the Gulf of America and Norway as key markets for Z-Lite, while saying the broader pipeline for Neptune chemistry extends across international deepwater regions.

Management said deeper, hotter and more technically complex wells are creating a need for specialized completion-fluid chemistries. Sanderson said the company expects its technical expertise, service capabilities and future vertically integrated bromine supply to support participation in those projects.

Arkansas Bromine Project Remains on Schedule

Tetra said its Arkansas Bromine Project remains on schedule and on budget, with mechanical completion expected in about 12 months and first production expected in early 2028. Detailed engineering is expected to be completed in the first quarter of 2027, while the next phase of well development is scheduled to begin in mid-November.

The facility is expected to begin production at an annualized rate of 37 million pounds of bromine in early 2028 and ramp to its 75 million-pound capacity by 2030. Murphy said the project has logged more than 60,000 work hours with no safety incidents and completed more than 2,200 welds without defects or rework.

The company expects its completion fluids business alone to consume more than the facility’s planned first-year output. Tetra will supplement plant output with its long-term bromine supply agreement, which extends through 2029. By 2030, management expects combined demand from completion fluids and PureFlow zinc bromide electrolyte applications to exceed the planned 75 million-pound capacity.

Murphy said the company is managing third-party bromine purchases through 2026 and 2027, while internal production is expected to provide a longer-term, lower-cost supply source. Management also cited potential opportunities to sell into other bromine markets if demand from its primary businesses does not fully absorb capacity.

Oasis Pipeline and Financial Position

Tetra said it has seven Oasis water-treatment projects in its pipeline, including four tied to data centers and behind-the-meter power requirements and three focused on reducing produced-water disposal. Management said data-center projects could initially involve brackish-water treatment before transitioning toward produced water.

Six beneficial-reuse permit applications are pending before the Texas Commission on Environmental Quality, though Murphy emphasized that Tetra’s customers are the permit applicants and that the company cannot predict approval timing. Management said it continues to engage with the TCEQ and the Environmental Protection Agency on technical questions and pilot water-quality results.

For the first nine months of 2026, Tetra generated $31.3 million of operating cash flow and spent $77.6 million on capital expenditures, primarily reflecting Arkansas construction spending. The company ended the quarter with $84 million of cash and equivalents, $42 million of short-term investments, $184 million of total debt and $58 million of net debt.

In October, Tetra amended its $190 million term credit agreement, extending maturity to Dec. 31, 2030, reducing interest-rate margins by 75 basis points to SOFR plus 5%, and deferring about $19 million of principal amortization payments to 2030.

For the fourth quarter, Tetra expects consolidated revenue and adjusted EBITDA to increase by double digits from the fourth quarter of 2025. For 2027, management expects revenue and EBITDA growth relative to 2026, driven by deepwater completions, international production testing, SandStorm adoption, electrolyte demand and industrial chemicals.

About Tetra Technologies (NYSE:TTI)

TETRA Technologies, Inc is an energy services and products company that supports oil and gas exploration and production activities. The company provides specialized fluids, water management solutions and related services used in drilling, well completion, production and industrial applications.

TETRA's Completion Fluids & Products business supplies clear brine fluids, including calcium bromide and other bromide-based products, as well as associated completion-fluid services. These fluids are used to control pressure and protect well formations during completion and workover operations.

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