Tetra (tti) Q4 2025 Earnings Call Transcript

NYSE: TTI

TETRA Technologies

Market Cap

$1.5B

Today’s Change

(-19.30%) $2.15

Current Price

$8.99

Price as of February 26, 2026 at 1:29 PM ET

Date

Feb. 26, 2026 at 10:30 a.m. ET

Call participants

• Chief Executive Officer — Brady M. Murphy
• Chief Commercial Officer (Incoming Chief Financial Officer) — Matt Sanderson
• Chief Financial Officer — Elijio V. Serrano

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Takeaways

• Completion Fluids & Products revenue — $83.7 million for the quarter, a 22% increase.
• Completion Fluids & Products adjusted EBITDA margin — 28.2% in the quarter; full-year margin improved 420 basis points to 33% from 28.9% in the prior year.
• Water & Flowback Services revenue — $63.0 million for the quarter, flat despite the typical U.S. year-end slowdown, offset by higher activity in Argentina.
• Water & Flowback adjusted EBITDA margin — Improved by 100 basis points during the quarter; full-year margin was 12%, with 2026 guided to the mid-teens.
• Base business free cash flow — $21.8 million in the quarter and $83 million for the year, surpassing the communicated $50 million objective.
• Consolidated free cash flow — $33 million for the year, including $45 million of Arkansas investments and $19 million from the Kodiak Gas Services sale.
• Cash on hand — Ended the year at $73 million, doubling the starting balance, despite $45 million Arkansas outlays.
• Net debt — $109 million, improved from $143 million at the previous year-end.
• Net leverage ratio — Improved to 1.1x from 1.8x at year-end 2024.
• Working capital — Reduced by nearly 20%, or $21 million, to $88 million at year-end, even as quarterly revenue increased by $12 million year over year.
• Days sales outstanding — Improved by 13%, decreasing from 71 days to 62 days.
• Base business capital expenditures — $30.5 million for the year; Arkansas investments separately totaled $45 million.
• Bromine production (West Memphis plant) — Achieved a record, producing 40% above the annual supply agreement volume.
• Calcium chloride business — Set new revenue and adjusted EBITDA records; tech grade for chip manufacturing grew 144% domestically.
• Arkansas bromine project — Phase 1 completed on time and materially below budget; plant design now targets 75,000,000 pounds output (56% above prior feasibility study’s 48,000,000 pounds).
• Third-party bromine supply — Secured through 2027 to bridge demand until in-house plant comes online, at higher input cost.
• Patent secured for OASIS desalination — Patent issued for the TETRA OASIS TDS end-to-end desalination solution addressing oil and gas produced water reuse.
• Argentina early production facility contracts — Three new contracts secured with business projected to double 2026 revenue versus 2025.
• Tax loss carryforward — Approximately $84 million carryforward available, used to offset approximately $7 million of U.S. cash taxes in 2025.
• Corporate expenses — Quarterly corporate and other expenses were $11.3 million, driven by increased variable compensation and higher TSR-related payouts.
• Corporate G&A reduction — Office relocation expected to lower general and administrative expenses by $2 million per year.
• Sustained technology leadership — For a fifth straight year, named top supplier in Gulf Of America for product quality and performance (Kimberlite International Oilfield Research).
• 2026 segment margin guidance — Completion Fluids & Products adjusted EBITDA margin guided between 25%-30%; Water and Flowback margin targeted to mid-teens.
• Desalination project pipeline — Customer shift from 25,000 to 100,000+ barrels/day plant sizes for data center cooling; commercial discussions projected within three to four months with earliest plant startup in Q2 2027.
• CFO transition — Elijio V. Serrano retiring as CFO in March 2026, with Matt Sanderson assuming the role.

Summary

TETRA Technologies (TTI 19.30%) delivered record performance for the year, driven by sequential gains in both Completion Fluids and Water & Flowback Services, expanded production at its West Memphis plant, and strategic expansion in Argentina. Management confirmed completion of Phase 1 at the Arkansas bromine project, substantially increasing future bromine output, and secured a critical patent reinforcing the company’s position in water desalination for industrial reuse. The company fully funded its growth initiatives while maintaining improved leverage, reduced working capital needs, and a strong cash position.

• CEO stated, “Gulf of America revenue increased well over 50% in 2025 compared to 2024 driven by participation in deepwater projects, including three CS Neptune wells.”
• Incoming CFO Sanderson noted, “For the three-year period that we are being compared to our peers, we were in the top quartile of our peer group.”
• Sustained innovation and vertical integration supported margin retention even as material costs rose for third-party bromine supply.
• Argentina is positioned as a cash self-sufficient operation with anticipated U.S. cash repatriation beginning in 2027, driven by long-term contract stability.
• Patent recognition for desalination technology opens new opportunities amid increased industrial water demand from the data center sector in West Texas.

Industry glossary

• Completion fluids: Specialized liquids used in the preparation and maintenance of oil and gas wells after drilling is completed and before production starts, often facilitating high-pressure, high-temperature well operations.
• CS Neptune: Brand name for TETRA Technologies’ proprietary zinc-free, high-density completion fluid used in ultra-high-pressure offshore wells.
• OASIS technology: TETRA Technologies’ patented end-to-end solution for desalinating produced water from oil and gas operations.
• Sandstorm technology: TETRA Technologies’ proprietary production testing offering known for operational efficiency at well sites.

Full Conference Call Transcript

Brady M. Murphy: Thanks, Kurt, and good morning, everyone. Welcome to TETRA Technologies, Inc.’s fourth quarter and total year 2025 earnings call. Before we get into the quarterly results and outlook, I would to begin the call by acknowledging and highlighting the exceptional efforts in the 2025 performance of our leadership team and all of the TETRA Technologies, Inc. employees. 2025 was a challenging year for the U.S. oil and gas industry, marked by reduced levels of U.S. onshore activity and a volatile global economic environment. But despite these headwinds, there is a long list of TETRA Technologies, Inc.’s record financial achievements as well as overwhelming support for the company’s strategic developments.

I will highlight some of the outstanding financial achievements and progress against 23 objectives, which we communicated as part of our One TETRA 2030 strategy at our investor conference at the New York Stock Exchange last September. I will then turn it over to Matt Sanderson and Elijio V. Serrano to summarize our fourth quarter results and provide an update on our balance sheet. Headlining our exceptional 2025 performance is our Gulf Of America completion fluids team. For the fifth consecutive year, TETRA Technologies, Inc. was ranked the top supplier in the Gulf Of America for product quality and overall performance for offshore completion fluid suppliers in the well-respected Kimberlite International Oilfield Research Report.

As the market and technology advanced to 20K ultra-high-pressure, ultra-high-temperature wells, our innovation leadership is resulting in market gains. TETRA Technologies, Inc.’s Golf of America revenue increased well over 50% in 2025 compared to 2024 driven by participation in deepwater projects, including three CS Neptune wells that we completed in the first half of the year for a super major. Our unique zinc-free high-density completion fluid allowed them to complete their high-pressure wells on schedule without exposing their production facilities to zinc in the production flowback. The performance of our Gulf American team drove our Completion Fluids & Products EBITDA margins to improve 420 basis points from 28.9% in 2024 to 33% in 2025.

The combination of our vertically integrated business model as the only service provider that manufactures our own fluids and our unique technology portfolio gives us a very strong market position. Supporting our global completion fluids business is our West Memphis manufacturing team, which is the heart of our bromine-based completion fluids and our PureFlow electrolyte production. Using elemental bromine sourced through a combination of open market purchases and our long-term supply agreement, we produce offshore completion fluids, including CS Neptune, and the PureFlow-based electrolyte. 2025 was a record production year for West Memphis, producing 40% more bromine end products than our long-term bromine supply agreement allows.

The West Memphis team also expanded their production and distribution capacity to ship PureFlow electrolyte to Eos in tanker trucks rather than totes to keep up with their expanded production. Another 2025 record performance is our global calcium chloride business, which set both revenue and Adjusted EBITDA records and again outperformed GDP in 2025. We hold a market-leading position in Europe and a strong second place in the U.S. market. In addition to our food grade products supporting the reintroduction of chip, we are encouraged by the outlook for our tech grade product lines and other high-tech manufacturing operations in the U.S.

Although still a small percentage of our U.S. calcium chloride revenue, our tech grade for chip manufacturing grew by 144% in 2025 over 2024. The combination of these three record-setting operations—Gulf Of America, West Memphis plant production, and calcium chloride business—not surprisingly resulted in record-level revenue and Adjusted EBITDA for the Completion Fluids segment as a whole in 2025. This performance occurred despite an estimated 55% fewer floating deepwater rigs operating globally than the 2014 peak. And we believe we are still in the early days of anticipated Eos production ramp up.

This is one of the reasons we are still very well positioned to benefit from the multiyear deepwater activity recovery and the electrolyte growth highlighted in our One TETRA 2030 strategy. Moving on to the strategic milestones for 2025 in the fourth quarter. During the year, we made significant progress on our new bromine plant and reached a major milestone in December by erecting a 120-foot-tall titanium bromine tower and support structure at our Evergreen plant site in Southwest Arkansas. We completed Phase 1 of the plant three phases on time and materially below budget.

We have advanced the detailed engineering design for Phases 2 and 3, placed orders for long-lead items, refined the plant’s total cost, and are finalizing the detailed schedule. By designing the plant around the bromine tower’s capacity of 75,000,000 pounds of bromine annually, we will have 56% more low-cost bromine available to us than the 48,000,000 pounds we published in our definitive feasibility study in August 2024. Since that study was completed, we have increased our demand outlook for deepwater completion fluids and now expect total bromine product demand to reach the 75,000,000 plant capacity by 2029.

Once we have the final upstream well field schedule—Standard Lithium and Equinor’s Reynolds Unit, from which we intend to receive the post-lithium-extracted brine—with board approval, we intend to FID the project. For the reasons highlighted, we expect the Arkansas bromine project’s economics to be improved from what we previously published. Continuing on with our Arkansas brine resources, we are pleased with the progress towards finalizing JV terms with Magrathea for the production of magnesium metal using the rich concentration of magnesium also in the same Smackover brine on our 40,000 acres. Magnesium is classified as a critical mineral by the U.S. government and is used to produce a highly valued metal for the Department of War and other U.S. industries.

Through our planned partnership, we would combine Magrathea’s advanced process technology with TETRA Technologies, Inc.’s deep operational expertise and a world-class magnesium resource base from our Southwest Arkansas brine acreage. Magrathea has already secured Defense Production Act Title III funding from the Department of War to support its commercial Phase 1, planned to be on-site at TETRA Technologies, Inc.’s Evergreen plant. We are optimistic that further government support is possible for our future commercial plans. Finally, as it relates to our Arkansas brine resources, and as we highlighted in our 2030 strategy, lithium has been viewed as a future opportunity beyond our 2030 targets.

However, with lithium prices increasing back to over $20,000 per metric ton, we are reengaging direct lithium extraction technology companies and evaluating technological and cost efficiency advantages to understand the current economic environment. As a reminder, TETRA Technologies, Inc. is the designated operator of 65% of the brine minerals including lithium, while ExxonMobil owns the remaining 35%. Our final strategy update concerns desalination for beneficial reuse. We are very pleased with the results of our EOG commercial plant desalination operation in the Permian Basin. This Phase 2 grassland study has been running with over 95% uptime for the past four months ing completion of the greenhouse Phase 1 study.

This grassland study is evaluating oil and gas produced water desalinated through TETRA Technologies, Inc.’s OASIS technology. Of great significance is that TETRA Technologies, Inc. was issued a patent for our TETRA OASIS TDS end-to-end desalination solution. We are pleased that our unique pretreatment combined with exclusive membrane and post-treatment technologies has been recognized as a unique and patentable solution for desalinating oil and gas produced water for beneficial reuse. Our biggest desalination update since our Investor Day in September is the growing attractiveness of West Texas for data centers, which has shifted our customers’ priorities and our focus.

With data centers straining electric utility grids and driving price increases, behind-the-meter, cost-effective power has become a major driver for data centers. With West Texas’ low-cost abundant natural gas, ample and affordable land, and a friendly regulatory environment, it is easy to understand why. The one challenge West Texas does have is a lack of fresh water for power and data center cooling. However, with over 20,000,000 barrels of produced water per day, there is far more water available by desalinating produced water.

This is an extremely attractive option since operators need to reduce the amount of water they reinject for disposal, and converting it into a viable resource for power and data center cooling is a double win given they now have a revenue source instead of incurring disposal costs. Our customer plan for 25,000 barrels per day plants has been shifted to greater than 100,000 barrel per day desalination plants, as one data center could require as much as 200,000 barrels of desalinated water. This is a very dynamic environment that has not changed the fact that operators need a solution for disposal well pore space filling up.

However, it has provided an exciting acceleration opportunity that has a significant potential for TETRA Technologies, Inc. All these efforts are contributing towards the goals we laid out for 2030, including our future segments focused on specialty chemicals and water desalination and treatment. Looking forward to 2026, we see continued momentum towards our 23 objectives. We expect incremental revenue growth driven largely by a material increase in electrolyte business and major contract awards in Argentina. Argentina has been a real success story for us as our team has secured contracts to meaningfully expand our production testing business anchored by our proprietary and highly efficient Sandstorm technology. In addition, our team secured three early production facility contracts.

The combination of winning more early production facility contracts and gaining market with Sandstorm is expected to double our revenue in 2026 compared to 2025. Argentina’s margins are accretive to our overall water management and flowback margins, and are more stable given the long-term nature of our contracts. On the completion fluid side, Gulf Of America activity in 2025 was heavily weighted towards completion and less towards drilling. 2026 activity is forecasted to be higher in drilling, including more exploration, with less completion activity. As a result, we do not expect the Gulf Of America to reach the same record levels as in 2025. However, this is projected to cycle into the stronger 2027 completions activity.

And our 2030 targets for this business are on track. Our U.S. onshore water and flowback services business continues to benefit from longer laterals, increased sand and water usage, and more production-related activities, including water treatment and recycling. We expect the net impact of all these to result in overall modest growth in 2026. We have secured third-party bromine supply for 2026 and 2027 to bridge our growing bromine demand until our bromine processing plant is brought online. These third-party supplies will allow us to keep pace with expected material increase in electrolyte and robust deepwater market, but they do come at an incrementally higher cost relative to our current long-term bromine supply agreement, which is consistent with our expectations.

Although it is possible for one or more CS Neptune jobs to materialize in 2026, without CS Neptune projects and somewhat higher short-term cost of bromine, we expect our Completion Fluids & Products Adjusted EBITDA margins to be in the 25% to 30% range, which is consistent with the average margin range for this segment over the past seven years. The increased cost for additional bromine supply has been anticipated as a bridge until we have our bromine processing plant operational. But it supports the strong business case and significant EBITDA increase we expect for this segment starting in 2028 when the plant is operational.

For water and flowback services, the continued focus on differentiated technology and our profitable international growth contribute to improved Adjusted EBITDA margins from 12% in 2025 to the mid-teens in 2026. With that, I will ask Matt Sanderson, who is currently and for the past two years has done a great job as our Chief Commercial Officer, to update us on the fourth quarter highlights, then Elijio V. Serrano to close out with our balance sheet update. Before turning the call over to Matt and Elijio, I would to again express my and the Board’s deep appreciation for Elijio’s contributions and efforts over the past thirteen years.

Last October, we announced that Elijio had notified TETRA Technologies, Inc. of his intentions to retire in March. Over the past six months, Elijio has worked with Matt to ensure a seamless and orderly transition of the CFO responsibilities. Matt has been with TETRA Technologies, Inc. for over nine years and, as stated, most significantly as Chief Commercial Officer. The Board and I spend a lot of time on succession planning to ensure we have the talent necessary in the organization to execute on the base business and deliver our longer-term goals. This transition will allow us to do so.

Elijio has agreed to remain available to Matt, me, and the Board as an adviser so we can leverage his skills, knowledge, and relationships with our investors, the financial community, our lenders, and the finance team. This might be Elijio’s last quarterly earnings call; we fully expect that, in the background, he will continue to support the organization as we methodically march towards our 2030 goals. With that, Matt will provide some additional color on the fourth quarter results before handing over to Elijio.

Matt Sanderson: Thank you, Brady. As mentioned, 2025 was a record-setting year for TETRA Technologies, Inc. on several fronts. This included our strong fourth quarter performance. Completion Fluids & Products revenue of $83.7 million was up 22% compared to a year ago and included a material increase in shipments of electrolyte. Our Adjusted EBITDA margins remained strong at 28.2%. Water & Flowback Services revenue of $63.0 million was flat compared to the third quarter despite the traditional year-end slowdown in the U.S. market.

Conversely, we saw stronger activity in Argentina as we started another early production facility during the quarter and expect to start another one this week, setting us up for a strong year in 2026 in the Vaca Muerta region, as Brady mentioned earlier. Production testing activity remains strong on the back of our Sandstorm technology. Adjusted EBITDA margins improved 100 basis points on aggressive cost reductions and a continued focus on new technology and automation aimed at reducing personnel at the well site. Despite competitive pricing pressures in U.S. demand, our Adjusted EBITDA margins remained relatively flat during the year. Our focus remains on leveraging technology, on higher-margin opportunities, and generating free cash flow in this segment.

Corporate and other expenses were $11.3 million and included materially higher variable compensation expense resulting from our team’s record 2025 performance. This variable compensation includes both short-term and long-term incentives, including returns on net capital employed targets and a total holder return, or TSR, over a three-year period that is structured to align management’s interests with those of our holders. For the three-year period that we are being compared to our peers, we were in the top quartile of our peer group. As a result of that increase in holder value, our long-term variable cash compensation increased $2 million over the third quarter.

In the fourth quarter, we also changed our corporate office location, which will reduce our corporate G&A expenses by approximately $2 million per year. We will be participating in several upcoming investor-related events in the first part of this year that have been listed on our website. I look forward to working closely with our current and future holders along with the broader investor community. On a personal note, I would to congratulate Elijio on his upcoming retirement. I sincerely appreciate all of Elijio’s support during these past nine years, and I wish he and Mary all the best in the next chapter in their life together.

With that, I will turn it over to Elijio to cover cash flow and the balance sheet.

Elijio V. Serrano: Thank you, Matt. I will highlight three areas, then we will open the call up to questions. The first one is free cash flow. Cash flow from the base business in the fourth quarter was very solid: $21.8 million. For the year, free cash flow from the base business was $83 million. As you recall, all during 2025, we have been communicating our objective of generating over $50 million of base business free cash flow, and we did $83 million. Included in 2025’s free cash flow was $19 million in cash proceeds from the sale of our s in Kodiak Gas Services, ing our divestiture of CSI Compressco.

Just we did with our previous sale of s of Standard Lithium, we timed our sale of Kodiak s near their 52-week high. The organization is very focused on managing cash flow and managing working capital so we can maximize cash flow from our base business to invest into our bromine project in Arkansas. Despite a $12 million increase in fourth quarter revenue compared to a year ago, our cash management efforts allowed us to reduce working capital by almost 20%, or by $21 million, to $88 million at the end of 2025.

To demonstrate the quality of our customers and our internal focus on timely invoicing and collections, days sales outstanding improved 13% from 71 at the end of 2024 to 62 days outstanding at the end of 2025. Base business capital expenditures were $30.5 million, and investments in Arkansas were $45 million. We also capitalized $4.5 million of interest expense consistent with GAAP requirements on large capital projects. Consolidated TETRA Technologies, Inc. free cash flow, including all our Arkansas investments, was $33 million in 2025, demonstrating the strength of our base business to allow us to invest into the projects and still be free cash flow positive.

This will allow us to keep making progress towards our 2030 goals without over-levering TETRA Technologies, Inc. The second topic of emphasis is our balance sheet. Even after we invested $45 million, we ended the year with cash on hand of $73 million, double where we started the year at. Net debt is $109 million, down from $143 million at the end of 2024. Our net leverage ratio improved from 1.8x at the end of 2024 to 1.1x at the end of 2025. We have nothing outstanding on our revolvers. As of this week, we had borrowing capacity of approximately $7 million on our revolvers. Brady mentioned the growth in our business in Argentina. Argentina is cash self-sufficient for us.

We are not having to support Argentina by moving cash there to double the business in 2026. We expect to begin repatriating cash to the U.S. in 2027 given the strong performance that we expect from them with long-term stable early production contracts. The third topic is our tax loss carryforwards. As of the end of 2025, we have a tax loss carryforward of approximately $84 million that can offset almost $303,100,000,000 of taxable income in the United States. In 2025, we were able to use approximately $7 million of this deferred tax asset to reduce our U.S. cash taxes in the United States.

This tax loss carryforward is of significant value to TETRA Technologies, Inc. and TETRA Technologies, Inc. holders as we continue to grow our business and move towards the 2030 goals with expected higher U.S. income from our bromine plant and from water desalination facilities. And lastly, given that this is my final earnings call, I would to express my appreciation to the TETRA Technologies, Inc. organization, our Board of Directors, the research community, and our holders for the opportunity to work with all of you. TETRA Technologies, Inc. is in a great position to deliver on our 2030 goals and create even more value to our holders as we grow our earnings.

Tiffany, with that, we will open the call to questions.

Operator: At this time, if you would to ask a question, press star then the number one on your telephone keypad. To withdraw your question, simply press star 1 again. We kindly ask that you limit your questions to one and one -up for today’s call. We will pause for just a moment to compile the Q&A roster. Your first question comes from Stephen Gengaro with Stifel. Please go ahead.

Stephen Gengaro: Thanks, and good morning, everybody.

Brady M. Murphy: Good morning, Stephen. Good morning, Stephen. It will be odd without Elijio here next quarter, but we will keep talking to him.

Stephen Gengaro: So I think the first thing is when we think about the comments on the fluid side and how the deepwater market looks in 2026 versus 2025 for fluids and how that evolves into 2027, can you just talk a little bit about what you are seeing? Any incremental color on how we should be thinking about the offshore piece, or basically the non-industrial piece, of fluids?

Brady M. Murphy: Yep. Sure, Stephen. As mentioned, we had a record-setting year for our Completion Fluids business in 2025. And really, when you think about it, we are still way below the market peak in deepwater in 2014. As I mentioned, we are 55% below where we were in the peak, and we are setting records financially. But we had a couple of tailwinds with us in 2025 because the Gulf Of Mexico, as I mentioned, was largely in completion phase. And these cycles happen in deepwater. If your drilling campaign is ongoing and you are doing less completions, that has an impact on us. If you do more exploration, that has an impact on us. 2025 was a great year.

2026 is still going to be a very strong year for us, but we are seeing a cycle into more drilling phase and less completion phase. Again, that will reverse itself in 2027.

Stephen Gengaro: Yeah, it does. And the other question I had on that was, when we think about margin progression on the fluid side, and obviously we can sort of back out the first half of the guidance parameters you gave, in 2025 you had the CS Neptune work. Is it fair to assume we do not see that in 2026 and 2027 until we bring the plant online?

Brady M. Murphy: That is correct. We do not assume CS Neptune work in 2026, and we have secured third-party supply to bridge until we bring the plant online, which will have a dramatic change.

Operator: Your next question comes from the line of Martin Whittier Malloy with Johnson Rice. Please go ahead.

Martin Whittier Malloy: Good morning. And, Elijio, I have enjoyed working with you for a number of years and wish you the best in retirement. The data centers are now part of the discussion, and it has kind of taken over, I would say, the opportunity set that we initially were thinking about. But it also includes the fact that you have to do additional engineering work. You had almost—well, you completed your 25,000 barrel per day engineering study—but clearly, when you go to 100,000 and above, you have to kind of restart that. Discuss why, if that is the case, why not just do four of them to hit that 100,000 goal?

Brady M. Murphy: Good question, Bobby. And we did anticipate that if we started out with 25,000 plants, as volumes increased, we would be able to build them in a train-type of environment—another 25,000 and another 25,000. But versus just going and building four separate, when you know you are going to start instead of a 25,000 plan and you are going to start with 100,000 or more, a larger facility obviously has efficiencies to be gained.

So with that in mind, our customer is asking us to prepare for a much larger facility, as opposed to, well, let us just build four 25,000s and put them together, because there are some economies of scale to be had out of a 100,000 barrel per day plant versus four separate 25,000 barrel per day facilities.

Martin Whittier Malloy: That makes a lot of sense. And maybe to dive a little bit deeper there, I think it took a couple quarters to get the engineering finalized for the 25,000 barrel a day plan. Do you think that might be a little bit accelerated, since I am guessing there is probably some crossover where you are kind of starting at second base rather than starting at first base with this engineering plan?

Brady M. Murphy: Yeah, absolutely. I mean, the fundamentals of the engineering are in place, so we will get some efficiencies as we move into the 100,000-plus plant size. And if we were starting from scratch, this would clearly be a six-month exercise, but we are not. We feel fairly confident within the next three to four months we will have a commercial discussion.

Martin Whittier Malloy: Great. And then just one last one from me. Just on the kind of base business—Water and Flowback Services, U.S.—if we think a good range of where you need to be to move into a commercial discussion, is it more ly, if you take the assumption that onshore U.S. activity stays flat, you can continue to outperform that just through the value add that you provided E&Ps, or is it probably more ly if it is in a flat environment, you stay flat as well?

Brady M. Murphy: Yeah. So, I mean, the Sandstorm technology uptake really continues with our customers, and we have more room to grow on that side of the business. As you probably heard during our Investor Day, we are deemphasizing our water transfer business somewhat. We are still supporting that business and looking for the efficiencies that we would to get out of that business, but investing less in growth. And as that piece of our business—which is our lower-margin business—becomes less of our North America business, then we fully expect that, along with Argentina, to continually drive our flowback side of the business to continue to increase and move our overall margins up in that segment in 2026.

Martin Whittier Malloy: Got it. Great. Maybe if I could squeeze in one more. I thought it was really exciting hearing the industrial calcium chloride for chip production had really outstanding growth in 2025. Could you just maybe remind us, is that being supplied to domestic chip manufacturing, international chip manufacturing, or is it a mix of both?

Brady M. Murphy: It is domestic, and we are in the early days of that growth. Calcium chloride provides a really valuable part of the solution for these chip manufacturers because it neutralizes fluorine or fluorides, which have an environmental concern. So we fully expect that business to grow as the chip manufacturing market grows here in the U.S.

Operator: Your next question comes from the line of John Tanwanteng with CJS Securities. Please go ahead.

John Tanwanteng: Hi. Thank you for taking my question. First part of the question: The incremental bromine—remember bromine feeds two important parts of our business, our completion fluids, our deepwater completion fluids, which had a record year in 2025—and then it also supports our electrolyte production, which Eos is ramping. The second part is, are you expecting to pass on some of that higher input cost through to your customers? Or is it purely just the demand for bromine exceeding what you already had contracted? Shortfall is expected when you ramp the new facility, or is there no issue with the long-term contract?

Brady M. Murphy: We are securing third-party supply well above now the long-term contract. There is no issue with the long-term contract, but as we have stated publicly, that contract does wind down through 2029, which dovetails very nicely with our bringing the plant online in 2028. We have some success with pricing because of our innovation leadership. That does help offset some of the increased price of bromine. But, again, that is consistent with the guidance range that we have given between 25% and 30% for the segment, which is consistent with our past seven years, really even overcoming the increased cost of bromine that we see in the short term in 2026 and 2027.

John Tanwanteng: Got it. Thank you. And then you did mention you are expecting to hit that plant capacity in 2029, just two years after you open it. I am wondering what the plan is for excess bromine supply after that. Is it to stay with these third-party contractors, or are there expansion opportunities that you can do with the assets that you have?

Brady M. Murphy: The 75,000,000 will be the current tower capacity that we have. We have plenty of resource in the ground in our brine. We will most ly, until we continue building out additional capacity, go to the market with incremental bromine supply above the 75,000,000—at least for a period of time—as we see whether or not we have a whole new plateau of future bromine growth above our 75,000,000. But for the short term, we would expect to go to the market for any needs above that.

John Tanwanteng: Do you have any expected shortfall in supplying bromine in the short term to both your completion business and the battery business, or are you expecting to satisfy all the demand with these new agreements?

Brady M. Murphy: We have contractually secured what we need for 2026. Obviously, as we get closer to 2027, we will do the same thing. But we are in good shape for the supply.

Operator: Your next question is a -up from Stephen Gengaro with Stifel. Please go ahead.

Stephen Gengaro: Thanks. Just a quick one, and I might have missed this earlier, so I apologize. The margin guidance you gave on the Water side for 2026 is pretty healthy. What is behind that guidance? And then any sense for seasonal factors, or any color you could give on where the consensus sits for the first quarter EBITDA, which I think is in the $23 million to $24 million range?

Brady M. Murphy: That is simply reflecting stronger pricing pressures in the Permian Basin that we are offsetting with aggressive cost actions that Roy McNiven and his team are taking. So we believe we will remain in the teens. As you know, we are not giving any guidance for the year, much less for the quarters. The only spikes that we see will be the second quarter spike that we traditionally see in Northern Europe because of the calcium chloride business.

Operator: Your next question is a -up from John Tanwanteng with CJS Securities. Please go ahead.

John Tanwanteng: Hi. Thanks for the -up. I do not know if you mentioned this specifically, but just given where you sit with the OASIS negotiations on the data center side, when is the earliest you think you could have a large-scale—you know, the 100-plus million—plants online and starting to produce? And does that also take into account factors the relative difficulty of, , getting gas turbines on-site and things that, given where backlogs are for power generation?

Brady M. Murphy: Probably the earliest I would say would be Q2 2027. That would be our expectation. We cannot comment on the other partners in these programs—kind of where they are on securing everything they need for these projects. But as it relates to data centers and our role, we are having specific discussions with multiple customers. They are aware of our timeline. Obviously, they are asking us if we can shorten that timeline, but that is a realistic timeline for us to stand up that size of a plant.

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TETRA Technologies

NYSE: TTI

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