管理層發言
Welcome to Oceaneering's Third Quarter 2025 Earnings Conference Call. My name is Tina, and I will be your conference operator. I will now turn the call over to Hilary Frisbie, Oceaneering's Senior Director of Investor Relations.
Thanks, Tina. Good morning, and welcome to Oceaneering's Third Quarter 2025 Earnings Conference Call. Today's call is being webcast, and a replay will be available on Oceaneering's website. Joining us on the call are Rod Larson, President and Chief Executive Officer, who will be providing our prepared comments; Alan Curtis, Senior Vice President and Chief Financial Officer; and Mike Sumruld, Senior Vice President of Finance. After Rod's remarks, we will open the call up for questions. Before we begin, I would like to remind participants that statements we make during this call regarding our future financial performance, business strategy, plans for future operations, and industry conditions are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Our comments today also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures can be found in our third quarter press release, which is posted on our website. I'll now turn the call over to Rod.
Thanks for joining the call today. In the third quarter, we surpassed the high end of our guidance range, generating consolidated adjusted EBITDA of $111 million, marking our highest quarterly performance since the fourth quarter of 2015. These results were largely driven by the ongoing conversion of higher-quality backlog in manufactured products, continued high activity levels, and a favorable project mix in our Offshore Projects Group, or OPG. Progression in Aerospace and Defense Technologies, or ADTech, as they onboard personnel and subcontractors to support large-scale programs, and sustained remotely operated vehicle, or ROV pricing and performance. Today, I'll focus my comments on our results for the third quarter of 2025, our outlook for the fourth quarter of 2025, our consolidated EBITDA, and free cash flow guidance for the full year of 2025 and our initial full year 2026 guidance.
Starting with our third quarter 2025 consolidated results compared to the third quarter of 2024, we generated revenue of $743 million, representing a 9% increase, and operating income rose 21% to $86.5 million. We made meaningful progress in free cash flow, generating $77 million after utilizing $24.2 million for investments in the business. We continue to return capital to shareholders, repurchasing approximately $10 million worth of our common stock shares, resulting in an ending cash position of $506 million. Now let's look at our results by business segment for the third quarter of 2025, also compared to the third quarter of 2024. Subsea Robotics, or SSR revenue and operating income were essentially flat as was the EBITDA margin of 36%. ROV revenue per day utilized increased to $11,254 from $10,576, offsetting the effects of lower but still solid ROV fleet utilization of 65%. Fleet use of 63% in drill support and 37% in vessel-based activity was similar to the same period last year.
The revenue split between our ROE business and our combined tooling and survey businesses as a percentage of our total SSR revenue was 77% and 23%, respectively, consistent with last year. As of September 30, 2025, we had 60% of the contracted floating rig market with ROV contracts on 78 of the 131 floating rigs under contract. We maintained our fleet count of 250 ROV systems. During the quarter, we sold a vessel that was underutilized in the survey market. We believe this will yield positive results in our survey business by reducing costs and focusing our efforts on delivering increased efficiencies through the enhanced simultaneous operations capabilities of the Ocean Intervention II. Manufactured Products operating income of $24.7 million and operating income margin of 16% doubled on a 9% increase in revenue. These results were driven by the continued execution of higher-margin backlog through our umbilical manufacturing plants as well as pricing improvements in our Grayloc and Rotator product lines.
Order intake during the quarter of $208 million was solid, and our backlog on September 30, 2025, was $568 million. Our book-to-bill ratio was 0.82 for the trailing 12-month period. OPG operating income increased 17% to $23.7 million on a 16% increase in revenue, with the operating income margin flat at 14%. These results reflect healthy vessel utilization in the U.S. Gulf and a favorable mix of intervention and installation projects for the quarter. For Integrity Management and Digital Solutions, or IMDS, operating income and operating income margin improved on a slight decline in revenue. These results reflect the absence of a one-time non-cash charge associated with the divestiture of our Marine Maritime Intelligence division in the third quarter of 2024. ADTech operating income significantly increased by 36% to $16.6 million on a 27% increase in revenue, with operating income margin improving slightly to 13%, driven largely by increasing activity levels associated with contract wins in our defense business.
Unallocated expenses of $46.3 million were in line with our guidance for the quarter. Turning to our outlook for the fourth quarter of 2025 as compared to the fourth quarter of 2024, we expect revenue to be lower as improvements in ADTech and SSR will only partially offset the reduction in international OPG projects. Consolidated EBITDA is projected to be in the range of $80 million to $90 million. By segment, for SSR, we anticipate increased revenue and operating income with the EBITDA margin expected to be in the mid- to upper 30% range. Our expectation for improved results is based on continued progression of ROV revenue per day utilized and improved utilization in our survey group with projects starting in the fourth quarter in the U.S. Gulf, Europe, and West Africa. For manufactured products, we expect significantly improved operating income on lower revenue with continued conversion of higher-margin backlog and cost reductions associated with our non-energy products.
For OPG, we project revenue and operating income to decrease significantly due to the absence of large-scale international intervention and installation projects that favorably impacted the fourth quarter of 2024, lower vessel activity levels in the U.S. Gulf, and the project timing. With respect to our leased vessel fleet, we have one charter in the international market that is expiring during the quarter that we do not intend to renew due to our expectation for seasonally lower activity and allowing us to better match lease costs to future projects. For IMDS, we forecast revenue to decrease and operating income to decrease significantly due to lower activity. For ADTech, we anticipate significant increases in both revenue and operating income on higher activity levels in our defense business. We project unallocated expenses to be in the $45 million range. For the full year of 2025, based on our fourth quarter EBITDA guidance, combined with our year-to-date EBITDA results, we expect to generate adjusted EBITDA in the range of $391 million to $401 million.
Our strong free cash flow generation in the third quarter gives us confidence to maintain our full-year guidance range of $110 million to $130 million. Now looking forward, I'd like to provide you with our initial outlook for 2026. As we announced yesterday, we are initiating consolidated EBITDA guidance in the range of $390 million to $440 million, driving similar levels of free cash flow as we expect to generate in 2025. This is based on our expectations for significant growth in ADTech and stable activity levels across our energy-focused businesses. In particular, for SSR, we forecast similar ROV utilization levels as in 2025 at improved pricing levels. Together with increased volume from surveys, this will generate slight increases in revenue and operating income and stable EBITDA margins. For manufactured products, we project significantly improved operating income and improved operating margins on decreased revenue due to the continued conversion of higher-margin backlog as well as improved performance and cost reductions from our non-energy product lines.
For OPG, we expect revenue and operating income to decrease on changes in project mix, while significant opportunities exist, customer schedules have not yet finalized. For IMDS, we forecast increased revenue and operating income. And for ADTech, revenue and operating income are expected to increase significantly, and operating income margins are expected to be similar to 2025 levels as we execute large-scale projects that have been ramping up throughout the year. Our 2026 forecast is based on the expectation that the government shutdown will be resolved in 2025. We plan to continue share repurchases in 2026 with approximately 5.8 million shares remaining under our existing repurchase authorization. We will provide more detailed guidance for 2026 during the year-end reporting process. In summary, we continue to see growth opportunities in each of the markets we serve beyond 2025, driven by supportive long-term commodity prices, improving visibility into an increasing number of contracted floating rigs in the second half of 2026 and beyond.
Stability in ROV revenue per day utilized, our ability to optimize our revenue mix between our customers' CapEx and OpEx spend, growth in global defense spending, and increased market demand for our mobile robotics technologies. Now before we take questions, I want to take a moment to acknowledge an important milestone. As we previously announced, Alan plans to retire from his role as CFO on January 1. During his 30 years with Oceaneering and 10 years as CFO, Alan has been more than a financial steward. He's been a trusted adviser, a steady hand, and a thoughtful leader. His ability to challenge assumptions while remaining open to the perspectives of our employees, customers, investors, and other stakeholders has helped us to shape our strategy in meaningful ways. More than that, Alan is a true Oceaneer, embodying our culture of innovation, collaboration, and a relentless commitment to excellence.
His steady presence has shaped not only our financial direction but also the way we lead and work together. Alan, on behalf of all Oceaneers and our Board of Directors, thank you for all you've done for our team and for Oceaneering. We look forward to your continued contributions as you transition to an advisory role. I'm also happy to introduce Mike Sumruld, our Senior Vice President of Finance, who joined the call today. Mike brings deep industry experience, and we look forward to his contributions to Oceaneering's continued growth. And we'll now be happy to take any questions you may have.
分析師問答
Our first question comes from Josh Jayne with Daniel Energy Partners.
First one for me, just when I think about the business moving forward toward the Ocean Intervention II, I think it was in August, and it was helpful to see the scale and capabilities of the vessel. One of my takeaways from the upgrades was how you'll ultimately be able to perform simultaneous autonomous survey operations. Maybe you could speak to that a little bit more, the advantages that's going to provide and how we should think about those capabilities and the business moving forward?
Sure. I think, Josh, I mean, you saw some of that in the tour, but the main takeaway is being able to do more with less. So you decrease the service expression, you decrease fuel usage, you decrease personnel on board. So much more efficient, not just from a cost standpoint, but also from a time standpoint, being able to do more. The other thing that isn't necessarily intuitively obvious because we're doing these things simultaneously and we're gathering this data, you're actually cross-checking data. So you're getting data from two different sources at the same time; you get a better idea early about your data quality. So I think all in all, it just provides the customer a more robust solution and getting that data into their hands sooner.
Okay. And then also this quarter, you announced a significant Subsea Robotics contract with Petrobras. I think it was $180 million. Could you speak to that market in 2026? How you expect it to hold up versus other geographies? And do you expect your market share in Brazil to increase moving forward for your other energy business lines?
Sure. I would just say, first of all, I was down there just about a month ago and got to meet with customers, including Petrobras. And the market is really robust. I mean, they've got some pretty significant plans. They've got Pelotos, which is coming up. They've just gotten approval, I think some of you might have seen in the news. They just got approval to drill up north near the mouth of the Amazon, which puts them in that Atlantic margin along with Suriname and Guyana. So, I mean, very exciting stuff up there. So it is ever forward in Brazil. They're looking really hard at what they have ahead of them. And these are as big opportunities as we've probably ever seen in Brazil. I think market share continues to increase. My conversations certainly led me to believe like I would say, even more in the past; but coming back recently, their interest in technology is really big. They are first adopters of a lot of the most interesting things we do.
We've got innovations like a riser inspection that will actually fly and do riser inspections. And we've done mooring line inspections and some of the other innovations. So both, I think those things that drive them to exploration places, but also with aging infrastructure, they can continue to work in places and exploit those investments they've already made in the existing fields. So, I just think Brazil is a very exciting market, and we're well positioned there.
Okay. And then maybe just one more quick one. Just on the ADTech business, which continues to grow from a number of the awards you announced and you highlighted in your '26 guidance. It sounds like there's confidence it will be an increasing portion of your business going forward. Can you just speak to how that business is expected to compete for capital moving forward and where you ultimately see it as a percentage of your business over the next three to five years? And then I'll turn it back.
Sure. I think the nicest thing about it is that as this business grows, it's really low capital intensity. And so that's one of the most exciting things about scaling up that business. It's a lot of engineering know-how. It's a lot of products we build. It actually allows us to make better use of the footprint we currently have. I've talked a lot about this, that people ask about we've got this defense business and we've got this energy business. They're really hard to separate. We do a lot of robotics. We do a lot of vehicle work. And all of those things happen throughout Oceaneering, right? So some of the things those customers want are really well-aligned with our IMDS business, for example. Some of them are really well-aligned with the SSR business, obviously, with vehicles. But I think that's the exciting part: we are able to scale that up significantly without a lot of capital. The other thing that we're starting to see more and more is seeing NATO spending increase, you see some other areas of the world, bearing more of the cost and more of the responsibility for defense.
We're seeing more international opportunities come up as well. And that's everything from things we've seen in Taiwan, things that we've seen with the Australian, U.K. and U.S. submarine build. So, it's growing on all fronts. The big picture really puts a lot of money back in the coffers for this work to go forward.
Yes, I would like to add a quick comment. Last week, during our management meetings, it was great to see the whole team coming together around the growth aspect of ADTech, along with the energy side of the business. It was inspiring to witness 80 individuals focused on how we can accelerate our progress.
Our next question comes from the line of Scott Gruber with Citigroup.
I wanted to get some more color on one of the segments in Q4 of Manufactured Products, that's been a big source of growth this year. You mentioned the continued strength on a year-over-year basis in Q4 on operating income, but on lower revenues. It looks like it's implying maybe a double-digit decline on revenues. What do you think that means for margins? And kind of what's driving the revenue decline? So maybe I'll pack that for us a bit more.
I'm checking on whether we might be indicating a double-digit decline in revenue. The key point is the quality of earnings, which is contributing to the increase in operating income and EBITDA for that segment. Much of the backlog we have discussed over the past two years, where we achieved better pricing, is beginning to materialize this year. We still have a significant portion of the backlog that we plan to address in '26. Additionally, we are focused on operational excellence in this area and are continually exploring ways to enhance our cost structure overall. We anticipate realizing some further benefits in '26.
Yes, while they are doing the calculations, we are running the plants, which are fully booked. We have a strong run planned not only for 2025 but also for 2026. As Alan has mentioned before, we have a solid backlog in all three umbilical plants and good throughput at Grayloc and Rotator. The Rotators are experiencing some of their best quarters ever. The revenue aspect does not suggest that we will lack a large book of work; rather, it depends on timing. The sales funnel looks promising, and we are booking into 2027. It's just a matter of when those larger projects will begin, but the outlook for Manufactured products is positive for next year.
Yes, yes, yes. I was just a bit surprised that the revenue would be declining sequentially here in the fourth quarter relative to last year. So moving on to ADTech, obviously, another great source of growth for you guys. Can you just give us some additional color on the kind of cadence of ADTech growth that's embedded in the '26 EBITDA guide?
Yes. I would start by mentioning that we are adding more contractors, subcontractors, and personnel for the large-scale project we announced in Q1. The team is continuing to onboard those subcontractors and is looking at how we will exit 2025. I believe this is a strong start for how we will approach 2026, but we also expect to see revenue gradually increase throughout the rest of 2026. Overall, we anticipate good year-over-year progression with the new program we have been awarded.
And that's just that program because it ramps through 2027, but we have additional opportunities that are yet to be determined. There is a lot of excitement in ADTech. It's performing well in that business. It's difficult to quantify until we finalize those other elements. We discussed that one significant project, and it will ramp through 2026 and into 2027.
And with no further questions in queue. I will now turn the call back to Rod Larson for closing remarks.
Well, since there are no more questions, I'd like to wrap up by thanking everyone for joining the call. This concludes our third quarter 2025 conference call. Have a great day.
Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.