• Order Intake: $2.9 billion in 2024.
• Share Repurchase: Approximately $20 million in shares repurchased.
• ROV Uptime Rate: 99% at year-end 2024.
• EBITDA Margin (SSR): Improved by 361 basis points, exiting 2024 at 36%.
• Quarterly Revenue: Highest since Q4 2015.
• Adjusted EBITDA: Surpassed $100 million for the first time since Q2 2016.
• Net Income (Q4 2024): $56.1 million or $0.55 per share, a 26% year-over-year increase.
• Consolidated Revenue (Q4 2024): $713 million, 9% higher year-over-year.
• Operating Income (Q4 2024): $77.9 million, 64% higher year-over-year.
• Adjusted EBITDA (Q4 2024): $102 million, a 35% increase year-over-year.
• Cash from Operating Activities (Q4 2024): $128 million.
• Organic Capital Expenditures (Q4 2024): $34 million.
• Free Cash Flow (Q4 2024): $94.5 million.
• Cash Balance (End of 2024): $498 million.
• SSR Operating Income (Q4 2024): $63.5 million, 26% higher year-over-year.
• ROV Revenue Per Day Utilized: $10,786, a 12% year-over-year increase.
• Manufactured Products Revenue (Q4 2024): $143 million, 8% increase year-over-year.
• OPG Revenue (Q4 2024): $184 million, 14% increase year-over-year.
• Consolidated Revenue (Full Year 2024): $2.7 billion, a 10% increase from 2023.
• Operating Income (Full Year 2024): $246 million, a 36% increase from 2023.
• Adjusted EBITDA (Full Year 2024): $347 million, a 20% increase from 2023.
• Free Cash Flow (Full Year 2024): $96.1 million.
• 2025 Revenue Growth Projection: Mid- to high single digits.
• 2025 EBITDA Guidance: $380 million to $430 million.
• 2025 Free Cash Flow Projection: $110 million to $130 million.

• Warning! GuruFocus has detected 3 Warning Sign with PRMB.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Oceaneering International Inc (NYSE:OII) recorded a notable order intake of $2.9 billion in 2024, reflecting strong customer confidence.
• The company achieved its highest quarterly revenue since the fourth quarter of 2015 and surpassed $100 million in adjusted EBITDA for the first time since the second quarter of 2016.
• OII reported a 26% year-over-year increase in net income for the fourth quarter of 2024, with consolidated revenue up by 9%.
• The Subsea Robotics (SSR) segment saw a 361 basis point improvement in EBITDA margin year-over-year, exiting 2024 at 36%.
• Oceaneering International Inc (NYSE:OII) demonstrated a strong commitment to safety, achieving a 56% reduction in high potential incidents in 2024.

Negative Points

• The manufactured products segment experienced a decline in operating income margin to 3% due to a reserve taken on an umbilical project.
• The book-to-bill ratio for the full year of 2024 was lower than expected at 0.97, compared to 1.31 in 2023.
• Integrity Management and Digital Solutions (IMDS) saw a decrease in operating income margin from 5% to 3% in the fourth quarter.
• Aerospace and Defense Technologies (ADTech) experienced a decline in operating income margin to 10% due to changes in project mix.
• Cash flow from operations declined by $6.7 million in 2024 compared to 2023, attributed to increased net working capital and cash taxes.

Q & A Highlights

Q: The upward progression of your ROV average revenue per day has been impressive. Has the increase in pricing been driven more by drilling support or vessel-based work? Do you expect a flattish trajectory or surpassing $11,000 a day as we move through the year? A: The pricing improvements are coming from both drilling support and vessel-based work. We expect activity to be flattish, but we anticipate further price realization through 2025, despite flat days. We continue to demonstrate value with 99% uptime, which supports price improvements over time. - Roderick Larson, President, CEO

Q: Your book-to-bill ratio for manufactured products was about 1 times for 2024, a decrease from 1.3 times in 2023. Is there any guidance for orders or book-to-bill for this year? A: We haven't provided specific guidance for book-to-bill, but our sales pipeline remains healthy, indicating our belief in future orders this year. - Roderick Larson, President, CEO; Alan Curtis, CFO

Q: How do you factor potential downtime or white space on rigs into your ROV utilization assumptions for 2025? A: Our plan assumes flattish rig activity. We've grown our market share in Brazil, which provides some protection against white space. The Petrobras contracts have become more favorable, allowing us to gain better pricing and market share. - Roderick Larson, President, CEO

Q: Can you update us on the progress of outsourcing manufacturing for mobile robotics forklifts and discussions on incremental orders? A: The outsourced manufacturing is progressing well, and we are satisfied with the quality. We are monitoring the pipeline and customer schedules, aiming to convert trial-level buyers into larger volume buyers. - Roderick Larson, President, CEO

Q: What are the drivers for margin improvement in the manufacturing products segment? A: Margin improvement is driven by better price backlog, efficient operations, and continuous throughput in factories. Improved margins are expected as long lead materials are received, and daily throughput helps absorb overhead costs. - Roderick Larson, President, CEO; Alan Curtis, CFO

Q: Could you elaborate on the strength in the OPG segment for Q4 and expectations for 2025? A: The OPG segment benefits from light well intervention work, which is cost-effective for customers and offers high margins for us. We see growth opportunities in reworking infrastructure in the Gulf of Mexico and West Africa, which stabilizes the OPG business. - Roderick Larson, President, CEO

Q: Can you discuss the vessel class ROV market supply/demand and multiyear opportunities? A: Utilization in the vessel class where we are mostly deployed has been strong. We see opportunities in multipurpose service vessels and ROV support vessels, with good utilization levels. - Roderick Larson, President, CEO

Q: Have you seen more M&A opportunities in the last six to nine months, and what are you looking for in potential acquisitions? A: We are seeing more M&A opportunities and are looking for disruptive technologies where we can be the best owner. The acquisition of GDi is an example, as it complements our ROV business and offers significant value. - Roderick Larson, President, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.