TETRA International Revenue at 10-Year High as Middle East Delays Persist

TETRA Technologies posted second-quarter revenue of $185.7 million, up 19% from the first quarter and 7% from a year earlier, with international and global offshore sales hitting 10-year highs for both the quarter and the first half of the year. That performance came despite delayed fluid shipments into the Middle East linked to the Iran conflict. Chief Executive Brady Murphy said the company's other markets and security of supply for bromine-based completion fluids more than offset the disruptions. "The Middle East conflict introduces some unpredictability and uncertainty," Murphy told analysts on the call. "But the strength of TETRA's other markets, particularly bromine-based completion fluids, more than offset delays or losses in Middle East sales."

Adjusted EBITDA rose 24% sequentially to $31.9 million, down from $36.2 million in the same quarter last year when the company completed a three-well TETRA Neptune project not expected to repeat. Total revenue included $113.1 million from Completion Fluids & Products, up 23% sequentially and 3% year-over-year, and $72.5 million from Water & Flowback Services, up 12% sequentially and 13% year-over-year. The Completion Fluids adjusted EBITDA margin came in at 26.4%, within the company's guided 25%–30% range, while Water & Flowback margin improved to 14.8% from 9.9% a year earlier.

TETRA's international business was led by Argentina, where revenue is on pace to double in 2026 from 2025 behind the company's early production systems and SandStorm flowback technology. International offshore revenues, excluding the delayed Middle East sales, were 59% above the next best second quarter in the past decade. Murphy said SandStorm is gaining market share in the U.S. and becoming a standard technology for key customers in international markets.

The company launched TETRA Neptune Z-Lite, a deepwater completion fluid that reduces zinc content while maintaining high densities. Beacon Offshore Energy awarded TETRA a contract to deploy the fluid in a three-well, 20,000 psi Gulf of America program. Murphy described Z-Lite's financial impact as a "midpoint marker" between a typical deepwater job and a full Neptune project. "Reducing the zinc concentration in that fluid is a material value for our customers, and we think it expands the market pretty significantly for our Neptune chemistry," he said.

TETRA's board approved the final investment decision for the Arkansas bromine project during the quarter. The company completed a follow-on equity offering that raised roughly $108 million in net proceeds, with the plant on schedule for completion in the fourth quarter of 2027 and startup in early 2028. Chief Financial Officer Matt Sanderson said the business case for the plant stands on its own, even without electrolyte sales to Eos Energy Enterprises. "We still have one more year to bridge until we get to the completion plant, which will be a material impact in terms of our cost of bromine," Sanderson said.

Demand for TETRA PureFlow zinc bromide electrolyte accelerated during the quarter, supported by expanding customer manufacturing capacity and increasing backlog. Murphy said the company believes the growing requirement for grid resiliency and long-duration energy storage is expanding the addressable market for zinc bromide battery technology. Adoption is also increasing across defense and critical infrastructure markets.

The Oasis TDS desalination solution for produced water advanced on several fronts. TETRA made progress on the engineering design of a 100,000-barrel-per-day plant at a hyperscaler's request. Murphy said customer engagements are expanding, the company's intellectual property position strengthened with Notices of Allowance covering pre-treatment technologies, and the permitting process through the Texas Commission on Environmental Quality is now a potential gating item. "There are six projects pending permit approval by the TCEQ," Murphy said. "This is gathering momentum. It's going to happen."

TETRA's lithium and magnesium resources in Arkansas offer additional optionality. Lithium prices have moved above $20,000 per metric ton, and the company is evaluating the timing of further development. Murphy said the company may decide to engage in engineering studies before the end of the year. The magnesium joint venture with Magrathea is likely further out, requiring a demonstration plant first.

For the remainder of 2026, Murphy said the base business should perform in line with market expectations. Base business includes completion fluids, water and flowback services, and electrolyte sales, but excludes TETRA Neptune jobs. The U.S. market is showing signs of improvement, with rig and frac activity expected to edge up in the second half. "The timing of planned and potential Neptune jobs in our growing pipeline could make a meaningful impact to our second half 2026 results," Murphy said.

Sanderson said the company ended the quarter with $154.6 million in cash and $183.3 million in debt, leaving net debt at $28.7 million and a net leverage ratio of 0.4 times.