Breaking Down Cactus, Inc. (WHD) Financial Health: Key Insights for Investors

You are looking at Cactus, Inc. (WHD) and wondering if the recent volatility in the oilfield services sector has finally caught up to this high-margin player, and honestly, that's the right question to ask. The short answer is yes, domestic activity is slowing, but the financial health remains remarkably solid. For the third quarter of 2025, the company delivered an Adjusted Earnings Per Share (EPS) of $0.67, beating the $0.58 consensus, on revenue of $264.0 million, which is a sequential dip but still shows operational strength. Here's the quick math: that Q3 performance helped solidify the full-year 2025 consensus revenue forecast around $1.06 billion, even with US land rig counts flat or slightly lower. Still, the real story is their fortress balance sheet, boasting nearly $446 million in cash and no bank debt as of September 30, 2025, which gives them the flexibility to execute on the planned acquisition of a majority stake in Baker Hughes' Surface Pressure Control business-a defintely smart move to accelerate international growth and offset domestic softness. We need to map out how this acquisition and the international expansion into the Middle East and Africa will translate into sustainable margin growth, especially as they navigate the ongoing tariff headwinds.

Revenue Analysis

You need to know where Cactus, Inc. (WHD) is making its money right now, because the near-term picture is showing a slight contraction, even with strong underlying performance in key areas. The company's Trailing Twelve Months (TTM) revenue as of November 2025 sits at approximately $1.11 Billion USD, reflecting a modest year-over-year decline of around -3.76% from the prior TTM period. This slowdown is a clear signal that the U.S. land rig count decline is starting to bite, despite the company's operational efficiency.

Cactus, Inc.'s revenue streams are concentrated in two primary business segments: Pressure Control and Spoolable Technologies. Pressure Control is the dominant revenue engine, providing wellheads and pressure control equipment, which are essential for oil and gas drilling operations. Spoolable Technologies, which offers composite pipe systems (a lighter, more corrosion-resistant alternative to steel), is the smaller but faster-growing segment, especially in international markets.

Here's the quick math on the segment contribution from the first quarter of 2025, which saw total revenue of $280.3 million:

• Pressure Control: Contributed about $190 million, or roughly 67.8% of total revenue.
• Spoolable Technologies: Contributed about $93 million, or roughly 33.2% of total revenue.

The sequential trend throughout 2025 is the real story for investors. While Q1 2025 saw a sequential increase in total revenue, both segments experienced declines in the third quarter. Q3 2025 revenue was $264.0 million, down from Q2. Specifically, Pressure Control revenue decreased by 6.2% sequentially, a drop of $11.1 million, primarily due to reduced domestic activity levels. Spoolable Technologies also saw a small sequential dip of 1.0%, or $1.0 million, though this was heavily offset by strong international sales.

To be fair, the company is defintely working to mitigate risks. The CEO noted in Q1 2025 that the Pressure Control segment achieved record levels of product sold per rig, showing they are maximizing revenue from each active rig. Plus, the Spoolable Technologies segment is capitalizing on non-U.S. product sales, which is a crucial diversification strategy against the soft U.S. land market. The pending acquisition of a majority interest in Baker Hughes' Surface Pressure Control business is a massive near-term change that will significantly alter this revenue structure and geographic mix, so watch for those integration details. You can read more about the full picture in Breaking Down Cactus, Inc. (WHD) Financial Health: Key Insights for Investors.

Profitability Metrics

You want to know if Cactus, Inc. (WHD) is making money efficiently, and the short answer is yes-their profitability margins are not just healthy, they are significantly higher than the Oil & Gas Equipment & Services industry average. The company's ability to generate profit from its core business remains a key strength, even as revenue has slightly declined through 2025.

In the first three quarters of 2025, Cactus, Inc. (WHD) consistently delivered a Net Profit Margin (the percentage of revenue left after all expenses and taxes) in the high teens, peaking at 19.3% in Q1 2025. To be fair, this is an incredibly strong performance in the oilfield services space, which is often volatile. The core operational efficiency is clear when you look at the quarterly breakdown:

Here's the quick math on operational efficiency: Gross Profit Margin (Revenue minus Cost of Goods Sold) tells you how well the company manages its direct production costs. Cactus, Inc. (WHD) started the year strong at 38.5% [cite: 2 (from first search)] in Q1, but then saw a dip in Q2 to 36.2%. This decline was defintely tied to external factors, specifically the 'tariff impacts to product margins' that hit the Pressure Control segment.

But here's the good news: the company didn't just sit there. Management's cost control efforts paid off quickly. By Q3 2025, the Gross Profit Margin had rebounded to 37.2%, and the Operating Profit Margin (which accounts for overhead like SG&A) recovered from a low of 22.2% in Q2 to 23.2% in Q3. This immediate margin recovery despite a sequential revenue decrease to $264.0 million is a clear signal of strong operational control and pricing power.

When you compare Cactus, Inc. (WHD)'s profitability ratios with the industry, their performance is a massive outlier. For the broader Oil & Gas Equipment & Services sector as of November 2025, the average Gross Profit Margin sits at 32.2%, and the average Net Profit Margin is a meager 4.9%.

Your takeaway should be simple: Cactus, Inc. (WHD) is a premium-margin player in a commodity-driven business. Their Q3 2025 Net Profit Margin of 19.0% is nearly four times the industry average of 4.9%. This gap is your margin of safety. It means they have a significant cost advantage or superior product pricing power, likely due to their highly engineered pressure control systems.

• Track Gross Margin: Watch for continued stabilization above 37.0% as tariff and cost reduction initiatives mature.
• Monitor Operating Margin: The Q3 recovery to 23.2% is a key indicator of effective cost management overriding revenue decline.
• Understand the Industry Spread: Cactus, Inc. (WHD)'s profitability is fundamentally different from its peers, suggesting a durable competitive advantage (economic moat).

For a deeper dive into their balance sheet and valuation, check out the full post: Breaking Down Cactus, Inc. (WHD) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

When you look at how Cactus, Inc. (WHD) funds its business, the first thing that jumps out is how little debt they carry. This is a deliberate, conservative strategy that sets them apart in the capital-intensive oil and gas equipment and services sector. Simply put, Cactus, Inc. is a fortress balance sheet company.

As of the third quarter of 2025, Cactus, Inc.'s debt-to-equity (D/E) ratio stood at a remarkably low 0.01. This means for every dollar of shareholder equity, the company has only one cent of debt. To put that in perspective, the industry average D/E ratio for Oil & Gas Equipment & Services is around 0.57 as of November 2025. Cactus, Inc.'s ratio is practically zero, and that's a massive risk mitigator for investors.

Here's the quick math on their financing structure, based on the latest 2025 fiscal year data:

The total debt of about $39.65 million is minimal, and crucially, the company reported having no bank debt outstanding as of March 31, 2025. The small amount of debt you see is almost entirely composed of capital lease obligations, which are essentially financing for equipment or property, not traditional corporate borrowings.

This conservative approach to financing means Cactus, Inc. is overwhelmingly funded by equity, not debt. It also means they have immense financial flexibility. Instead of issuing new debt, the trend is actually in the opposite direction. For the trailing twelve months ended September 2025, Cactus, Inc. had a net issuance of debt of $-8 million, which means they were actively paying down existing obligations. This is a defintely a sign of a company prioritizing financial strength.

The company balances its growth between retained earnings and its significant unused borrowing capacity. They aren't afraid to use their balance sheet, but they are incredibly selective about it. They have a revolving credit facility with $222.6 million of available capacity as of March 31, 2025. That's a huge, untapped safety net they can use for strategic moves, like acquisitions, without having to rush to the capital markets.

The key takeaway for you is this: Cactus, Inc. is not a growth-at-all-costs company. They prefer a self-funded model that minimizes interest expense and maximizes resilience in a cyclical industry. Exploring Cactus, Inc. (WHD) Investor Profile: Who's Buying and Why?

• Fund growth internally through strong cash flow.
• Maintain a pristine balance sheet for market downturns.
• Use equity (retained earnings) as the primary funding source.
• Keep a large credit facility available for strategic opportunities.

Liquidity and Solvency

You need to know if Cactus, Inc. (WHD) has the short-term cash to cover its bills, and the answer is a resounding yes. The company's liquidity position as of the end of the third quarter of 2025 is defintely a source of strength, driven by a massive cash reserve and minimal short-term debt.

The core of this strength lies in the two key liquidity ratios: the Current Ratio and the Quick Ratio (Acid-Test Ratio). The Current Ratio, which compares total current assets to total current liabilities, stood at a powerful 5.29 as of September 30, 2025. This means Cactus, Inc. has over five dollars of current assets for every dollar of near-term liability. That's a huge cushion.

And speaking of cushions, the Quick Ratio, which excludes inventory to measure immediate liquidity, was 3.74. A Quick Ratio above 1.0 is considered healthy, so a 3.74 shows exceptional ability to meet obligations even if product sales suddenly stopped. This is a very clean balance sheet.

Here's the quick math on their short-term position, based on Q3 2025 figures (in millions USD):

Working capital-the difference between current assets and current liabilities-is a robust $752.712 million, showing a substantial buffer for short-term operations and unexpected expenses. The change in working capital for Q3 2025 was a $-21 million outflow, mostly driven by a strategic increase in inventory, which has been a minor headwind to cash flow but is not a liquidity concern given the overall balance sheet strength. For a deeper dive into the company's long-term strategy, check out their Mission Statement, Vision, & Core Values of Cactus, Inc. (WHD).

The cash flow statement confirms this financial health. For the third quarter of 2025, Cash Flow from Operations (OCF) was a strong $61.8 million, demonstrating the core business is generating significant cash. This operating cash covers their investing and financing needs easily.

The Cash Flow from Investing (ICF) showed a net outflow of about $8.2 million for capital expenditures (CapEx) in Q3 2025, primarily for upgrades in their Spoolable Technologies segment. This is a manageable, growth-oriented investment, not a distressed spending spree. Cash Flow from Financing (FCF) was dominated by an $11.2 million outflow for dividend payments and associated distributions, which is a sign of returning capital to shareholders, not a reliance on external funding.

The most important part of this picture is Cactus, Inc.'s cash and cash equivalents, which stood at $445.614 million as of September 30, 2025, and they carry no bank debt outstanding. This is the ultimate liquidity strength. They are self-funding their operations and capital expenditures, plus paying a dividend, all from internally generated cash. The risk of a near-term liquidity crunch is practically zero, which gives management significant flexibility for strategic moves.

Valuation Analysis

You're looking at Cactus, Inc. (WHD) and asking the right question: Is the stock priced fairly, or is there a hidden opportunity or risk? My take, looking at the Q3 2025 data, is that the market has largely priced in the near-term headwinds, suggesting a Breaking Down Cactus, Inc. (WHD) Financial Health: Key Insights for Investors is a good idea. The consensus is a 'Hold,' but the underlying metrics show a compelling case for a modest upside.

As of November 2025, Cactus, Inc. (WHD) is trading around the $41.28 mark. That's a significant drop from its 1-year high of $69.98, but it's still well above the $33.20 low. Honestly, the stock has shed nearly 37% over the last 12 months, which tells you the market is concerned about the slower domestic activity and sequential revenue declines we saw in the third quarter of 2025. It's been a tough year for the stock, but the fundamentals are still solid.

Here's the quick math on the key valuation multiples for the 2025 fiscal year, which point to a reasonable valuation compared to historical figures and peers:

• Price-to-Earnings (P/E) Ratio: The forward P/E for 2025 sits at about 16.0x. This is a significant compression from prior years, making it look attractive against the broader market and many peers in the energy sector.
• Price-to-Book (P/B) Ratio: The P/B is projected at 2.04x for 2025. This ratio suggests investors are paying a reasonable premium over the company's net asset value, which is fair given its strong balance sheet and low debt.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio, which is great for comparing capital-intensive companies, is forecasted at 7.83x for 2025. This is a very healthy number, indicating the company's operating cash flow is not overly expensive to acquire.

Cactus, Inc. (WHD) is a dividend-payer, which adds a layer of stability. The company pays an annual dividend of $0.56 per share, giving a current dividend yield of about 1.30%. The important thing is the Payout Ratio, which is expected to be around 20.8% for 2025. That low percentage means the dividend is defintely sustainable and leaves plenty of room for reinvestment or future dividend growth. That's a sign of financial discipline.

The Wall Street consensus is a 'Hold,' which is often code for 'wait and see.' Six analysts have issued ratings, with four recommending 'Hold' and two recommending 'Buy.' The average 12-month price target is $47.75, which suggests a potential upside of about 15.7% from the current price. The upside is there, but the market is clearly waiting for the Baker Hughes surface pressure control business acquisition to close in early 2026 and for international revenues to ramp up meaningfully by late 2026.

What this estimate hides is the execution risk on that major acquisition. Still, the current valuation ratios suggest the stock is fairly valued to slightly undervalued, offering a margin of safety for patient investors who believe in the long-term international expansion story.

Risk Factors

You're looking at Cactus, Inc. (WHD), a company with a rock-solid balance sheet-zero bank debt and $445.6 million in cash as of September 30, 2025-but its risks are real and tied directly to the energy cycle. The biggest challenge is the volatility of the oil and gas market, plus the immediate pressure from trade policy and a major legal dispute. You need to map these near-term risks to the company's strong financial position to understand the true investment picture.

Here's the quick math: Cactus's Q3 2025 revenue was $264.0 million, down from $293.2 million in the year-ago quarter, a clear sign that the U.S. land drilling slowdown is hitting the top line. The company's fate is defintely tied to the cyclical nature of drilling activity, which means demand for its wellheads and pressure control equipment can drop fast when crude oil and natural gas prices fluctuate.

The recent earnings reports and SEC filings highlight a few critical areas where risk is materializing:

• Market Dependence: The Pressure Control segment, the core business, saw revenue drop by 6.2% sequentially in Q3 2025 due to reduced drilling activity. This is the classic oilfield services risk.
• Supply Chain & Tariffs (Operational/Financial): Steel tariffs are a persistent headwind, causing margin pressure. In Q2 2025, operating income dropped and margins compressed due to higher tariff-related product costs.
• Litigation Expense (Operational/Financial): The patent infringement litigation with Cameron is ongoing. Legal expenses rose in Q2 2025, adding $5.1 million in costs and weighing on results.

The industry is also facing external risks beyond the immediate cycle. Growing environmental, social, and governance (ESG) pressures and a global push toward renewable energy sources could restrict long-term demand for oil and gas equipment, impacting Cactus's growth prospects. Plus, industry consolidation among customers and competitors creates pricing pressure, making it harder to maintain the company's robust Adjusted EBITDA margin, which was 32.9% in Q3 2025.

To be fair, management is not sitting still; they are executing clear mitigation strategies. The full-year 2025 net capital expenditures are still expected to be in the $40 million to $45 million range, with a focus on these initiatives.

The company is addressing the tariff and supply chain risks head-on by ramping up production at its new Vietnam facility and diversifying its sourcing. This is a strategic move to insulate margins from trade policy volatility. More importantly, the acquisition of a majority interest in Baker Hughes' Surface Pressure Control business is a major strategic pivot, expanding Cactus, Inc.'s geographic footprint, particularly into the Middle East, which is a region poised for long-term energy infrastructure investment. This international expansion, alongside growth in the Spoolable Technologies segment and new opportunities in CCUS (Carbon Capture, Utilization, and Storage) and hydrogen, is designed to build a more resilient earnings base and offset the persistent weakness in U.S. land drilling activity.

Here is a snapshot of the key financial risks and the company's counter-strategy:

For a deeper dive into the valuation, you should read the full post: Breaking Down Cactus, Inc. (WHD) Financial Health: Key Insights for Investors. Your next step should be to model the impact of the Vietnam facility ramp-up on gross margins for 2026, assuming a 10% reduction in tariff-related costs.

Growth Opportunities

You want to know where Cactus, Inc. (WHD) is headed, and the short answer is: international and diversified. The company is actively mapping out a future less reliant on the volatile US onshore market, focusing on strategic acquisitions and supply chain flexibility to drive growth past 2025.

The core growth drivers are clear actions, not vague aspirations. First, the company is aggressively mitigating tariff risk, which has been a persistent margin headwind. Second, they are making a massive international pivot, and third, they are pushing new product lines like Spoolable Technologies deeper into the market. This isn't just talk; they are spending money on it, with full-year 2025 capital expenditure (Capex) guidance maintained between $40 million and $45 million.

Here's a look at the near-term financial projections and the engine behind them:

Strategic Initiatives and Market Expansion

The biggest near-term growth catalyst is the agreement to acquire a 65% controlling interest in Baker Hughes' Surface Pressure Control (SPC) business, expected to close in the second half of 2025. This is a game-changer because SPC's revenue is heavily international-about 85% is generated in the Middle East-and it comes with a substantial product and aftermarket service backlog of over $600 million as of December 31, 2024.

This acquisition immediately transforms Cactus, Inc.'s geographic footprint, providing a more stable, diversified revenue stream to offset softness in US land activity. Plus, the company is already leveraging its existing strengths:

• International Momentum: The Spoolable Technologies segment, acquired via FlexSteel, is seeing its highest international revenue since the acquisition, including the first gas service order from a major Middle East National Oil Company.
• Supply Chain Resilience: The new Vietnam forging manufacturing facility is key to tariff mitigation. Management expects this facility to supply 100% of US market needs by mid-2026, defintely stabilizing margins by reducing reliance on high-tariff Chinese imports.
• New Energy Footprint: Cactus, Inc. is positioning itself for the energy transition with early work in Carbon Capture, Utilization, and Storage (CCUS) and hydrogen applications.

Competitive Edge and Product Innovation

Cactus, Inc. maintains a strong competitive advantage with its capital-light business model and superior financial health. Their forecasted Return on Assets (ROA) for 2025 is 14.42%, significantly higher than the US Oil & Gas Equipment & Services industry average of 8.86%. This shows they are better at generating profit from their assets than their rivals. They also boast a robust balance sheet with $405.2 million in cash as of June 30, 2025, and no outstanding bank debt. That kind of liquidity allows them to execute on strategic moves like the SPC acquisition without straining the balance sheet.

In terms of product innovation, the company continues to push its Spoolable Technologies, which are critical for high-pressure, high-temperature applications. They recently secured their first commercial order for sour service pipe, which is used in high-H2S environments. This focus on specialized, high-margin products and services, coupled with a strong commitment to customer loyalty, positions them well to outperform the broader industry's forecast annual revenue growth rate of 2.79% with their own forecast of 10.18%. For a deeper dive into the financials, you can read more here: Breaking Down Cactus, Inc. (WHD) Financial Health: Key Insights for Investors.