Consolidated Revenue Growth
Consolidated revenue of $692 million in Q1 2026, up 3% year-over-year, driven by increases in SSR, Manufactured Products and Ad Tech.
Oceaneering International
· OII
April 22nd, 2026
Summary
- Earnings Call Date:
- 2026-04-22
- Change Since:
- -5.67%
- Next Earnings Date:
- 2026-07-22
Earnings Call Sentiment
NeutralThe call presented a balanced picture: revenue growth, strong order intake (~$1B) and technology/product milestones provide meaningful forward visibility and support the reaffirmed full-year guidance. However, material declines in operating income, net income and adjusted EBITDA, negative free cash flow in the quarter, SSR margin pressure from lower utilization and regional mix shifts, and an accrual in Ad Tech temper near-term results. Management expects sequential improvement in Q2 and a stronger second half driven by seasonality, backlog conversion and recent contract awards, which supports a cautiously constructive outlook despite current profitability challenges.
Company Guidance
Oceaneering reaffirmed guidance for Q2 and full-year 2026, expecting sequential improvement with Q2 revenue to increase and consolidated EBITDA of $100–110 million, and reiterating full‑year consolidated revenue growth of low‑ to mid‑single digits and EBITDA of $390–440 million; segment outlooks include SSR full‑year revenue growth of low‑ to mid‑single digits, average ROV revenue per day utilized modestly higher than 2025, fleet utilization in the mid‑60% range (Q1 utilization was 61%), drill‑support market share of 55–60% and SSR EBITDA margins in the mid‑30% range (Q2: higher revenue, flat operating income); Manufactured Products expects mid‑single‑digit Q2 revenue and operating income growth, full‑year operating income higher on slightly lower revenue with margins in the mid‑teens, backlog $492 million and a full‑year book‑to‑bill of 0.9–1.0; OPG (Offshore Project Group) sees Q2 flat revenue and lower operating income and a full year of lower revenue and significantly lower operating income with mid‑teens margins; IMDS (MDS) expects Q2 declines but still full‑year revenue and operating income growth with mid‑single‑digit margins; AdTech forecasts significantly higher Q2 and full‑year revenue and operating income with margins in the low‑teens; unallocated expenses are expected to be ~$50 million (reflecting wage inflation, FX and IT), and the company cited strong visibility from a ~ $1.0 billion Q1 order intake (including ~$300 million in SSR awards), maintained liquidity of $822 million, and a 250‑unit ROV fleet with 83 ROV contracts on 143 floating rigs (58% market share).
Strong Order Intake and Backlog Visibility
Q1 order intake of approximately $1.0 billion (one of the strongest since 2020) with SSR awards of about $300 million (some awards extending to 2031), providing multi-year visibility and a constructive book-to-bill.
ROV Pricing and Revenue per Day Improvement
Average ROV revenue per day utilized increased to $12,401 from $10,788 (Q1 YoY improvement). Management expects full-year average ROV revenue per day to exceed 2025 levels despite some Q1 non-repeatable items.
Product & Technology Milestones
Introduced Momentum next-generation electric work-class ROV and continued development of the Freedom autonomous platform (one commercial unit operating in West Africa; DIU testing/demo planned), highlighting investment in dual-use technology.
Ad Tech Momentum and Contract Wins
Ad Tech added approximately $175 million in new contract awards; Q1 Ad Tech revenue increased to $131 million with higher volumes in OTech and MSD, and government funding actions improving program visibility.
Manufactured Products Improvement
Manufactured Products revenue increased 6% YoY; operating income $26.1 million (18% of revenue) and operating income improved ~37% excluding a prior-year reserve. Rotator valves business performed strongly and won its largest-ever contract.
Solid Liquidity Position
Cash balance of $607 million and $215 million available under secured revolver, totaling $822 million liquidity. Free cash flow improved versus prior year (negative $76.5 million, a $30 million improvement vs Q1 2025).
Operator
Hello. Welcome to Oceaneering's First Quarter 2026 Earnings Conference Call. My name is Sarah, and I will be your conference operator. [Operator Instructions] With that, I will now turn the call over to Hilary Frisbie, Oceaneering's Senior Director of Investor Relations. Please go ahead.
Hilary Frisbie
Thanks, Sarah. Good morning, and welcome to Oceaneering's First Quarter 2026 Results Conference Call. Today's call is being webcast, and a replay will be available on our website. With me today are Rod Larson, President and Chief Executive Officer; and Mike Sumruld, Senior Vice President and Chief Financial Officer. Rod and Mike will provide our prepared remarks, and then we'll take your questions. Before we begin, please note that statements made on this call about 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 remarks also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures are included in our first quarter press release, which is available on our website.
I'll now turn the call over to Rod.
Roderick Larson
Good morning, and thanks for joining the call today. I'm pleased with our first quarter results, which reinforce our confidence in the year ahead. We generated consolidated revenue and adjusted EBITDA consistent with our guidance and drove strong commercial momentum, capturing new awards and extensions across the portfolio. At the se...
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