[Management View]
Tidewater's management emphasized the significant contributions of foreign exchange benefits and operational efficiency to their above-guidance margin performance. The company successfully refinanced to an unsecured bond structure and established a new revolving credit facility, enhancing financial flexibility. A $500 million share repurchase authorization was launched, representing over 20% of market capitalization, with a focus on opportunistic execution while prioritizing M&A.

[Outlook]
Management anticipates a sequential revenue decline of about 4% and a fiscal Q3 gross margin of 45%, due to regional day rate softness and higher idle vessel costs. Full-year 2025 revenue and gross margin guidance were reaffirmed. Structural vessel supply tightness persists, with negligible new build activity expected to support price discipline through at least 2026.

[Financial Performance]
- Revenue: $341.4 million, up 2% sequentially.
- Average day rate: $23,166, up 4% from the previous quarter.
- Gross margin: 50.1%, exceeding prior guidance of 44%.
- Net income: $72.9 million, or $1.46 per share, including a one-time noncash tax benefit of $27 million.
- Adjusted EBITDA: $163 million, compared to $154.2 million in the prior quarter.
- Free cash flow: $98 million, the second highest quarterly figure since the offshore recovery began.
- Share repurchases: $51 million spent to repurchase 1.4 million shares.
- New share repurchase program: $500 million authorized.
- Debt refinancing: $650 million unsecured five-year high yield bond issued at a coupon of 9.125%.
- Liquidity: Total liquidity exceeded $600 million post-refinancing.

[Q&A Highlights]
Question 1: Could you provide an update on M&A opportunities and the market outlook?
Answer: Discussions have become more constructive, with prices for secondhand equipment and companies becoming more reasonable. Management is encouraged by the current market conditions and is actively evaluating opportunities, ensuring any acquisitions provide significant value to shareholders.

Question 2: What is the visibility for demand in 2026 and beyond, and how does it impact day rates?
Answer: Tendering activity for 2026 is increasing, with a positive outlook for subsea construction and production-related work. The limited vessel supply is expected to support higher day rates as demand increases.

Question 3: How has the second-half outlook changed since the Q1 call?
Answer: Second-half expectations have been lowered, with a more modest improvement in utilization anticipated. The full-year guidance remains supported by strong first-half performance and firm backlog.

Question 4: Can you quantify the expected utilization improvement in Q3?
Answer: Utilization is expected to improve by a few percentage points in Q3, despite a projected 4% revenue decline due to lower day rates and higher costs.

Question 5: What are the drivers for the expected Q4 margin improvement?
Answer: Q4 margins are expected to improve due to reduced drydock days, increased utilization, and higher activity in Africa and Australia.

Question 6: What is the long-term outlook for the Africa region?
Answer: Africa's long-term outlook is positive, with expected demand from development projects in Southern Africa and new production in Congo. Short-term softness is anticipated, but significant work is expected in 2026 and beyond.

Question 7: How was the $500 million share repurchase program determined?
Answer: The program was based on current cash on hand, free cash flow generation, and the new revolving credit facility, allowing for flexible execution over the next year or so.

[Sentiment Analysis]
Analysts and management maintained a constructive and optimistic tone, focusing on strategic M&A opportunities and the positive long-term demand outlook. Management's confidence in their financial flexibility and ability to generate strong free cash flow was evident.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 |
|-----------------------|---------------|---------------|
| Revenue | $341.4 million| $333.4 million|
| Average Day Rate | $23,166 | $22,266 |
| Gross Margin | 50.1% | 50.1% |
| Net Income | $72.9 million | $45.9 million |
| Adjusted EBITDA | $163 million | $154.2 million|
| Free Cash Flow | $98 million | $94.7 million |
| Share Repurchases | $51 million | $39 million |

[Risks and Concerns]
- Outstanding accounts receivable from a primary customer in Mexico, accounting for approximately 14% of total trade AR.
- Lowered second-half expectations due to softer utilization improvements.
- Regional performance concerns, particularly in Africa, due to lower day rates, reduced utilization, and higher costs.

[Final Takeaway]
Tidewater delivered strong financial performance in Q2 2025, driven by higher day rates and operational efficiency. The company successfully enhanced its financial flexibility through debt refinancing and launched a significant share repurchase program. While the second-half outlook has moderated, management remains confident in their full-year guidance and the long-term demand outlook. Strategic M&A opportunities are being actively pursued, with a focus on creating shareholder value.