Release Date: March 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Ryan, you mentioned international was a big contributor to the strong revenue in Q4. Can you share what drove that inflection and how much revenue was international in Q4? A: Yes, international expansion has been a focus to stabilize our business. We have one of two slickwater fracturing systems approved in Saudi Arabia, which contributed significantly. In Q4, international chemistry revenue was about $4.5 million, with $9.2 million for the year, mainly from the UAE.
Q: Is it fair to assume international operations have higher margins, and how does this affect overall margins? A: Yes, international operations, especially in conventional cementing and asset stimulation, generally have higher margins. However, some components, like friction reducers in Saudi Arabia, are more commoditized, but overall, specialty products drive strong margins.
Q: With respect to EPA regulations and changes, how are customers responding, and what is the business development outlook? A: Despite regulatory delays, major players committed to flare monitoring continue to expand. We added five Veracal units this quarter, and we expect continued growth in monitoring new and existing wells, as many operators include us in their sustainability programs.
Q: Given the international exposure on chemicals, do you expect a pullback in Q1 like last year, or will Saudi approvals smooth this out? A: The international business will help smooth out Q1 lumpiness. While there is some seasonality in North America, we expect better performance this Q1 compared to past years.
Q: Can you explain the primary end uses of your data analytics products, like Xpect and Raman technology? A: Xpect is used for real-time monitoring of hydrocarbon quality, providing transparency in custody transfer. Raman technology, in partnership with Bruker, is used for vapor pressure monitoring and refined fuels analysis, enhancing our data as a service business.
Q: What are the key milestones for data analytics this year, and what are your targets for units in the field? A: We aim for double-digit increases in flare monitoring units and expect growth in custody transfer solutions in the latter half of the year. We plan to add 9 to 10 power generation units, with more detailed guidance in Q1.
Q: How does natural gas demand impact your business, and what is the outlook for chemistry and data analytics? A: Our technologies are well-suited for gas basins, providing significant ROI. The demand for LNG exports and power generation supports a bullish natural gas market, aligning with our long-term strategy.
Q: Should we expect working capital to unwind in Q1, and what CapEx is required for data analytics expansion? A: Yes, we expect a reduction in AR due to the shortfall payment. CapEx will be higher in 2025 to support data analytics growth, but it remains manageable with our current capital.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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