Cuộc họp công bố kết quả kinh doanh quý 3/2026 của Cactus (WHD): Lượng đơn hàng chờ xử lý tăng nhờ doanh số Spoolable tăng trưởng

Điểm tin chính

• Cactus báo cáo doanh thu quý 3/2026 đạt 431 triệu USD, giảm 4% so với quý trước, trong khi EBITDA điều chỉnh nhìn chung đi ngang ở mức 132 triệu USD.
• Biên EBITDA điều chỉnh tăng lên 30,6% từ mức 29,5% trong quý 2, nhờ kiểm soát chi phí, hiệu quả cộng hưởng từ thâu tóm, cơ cấu hoạt động và biên lợi nhuận mảng phụ tùng và sửa chữa tăng mạnh.
• Doanh thu mảng Kiểm soát Áp suất giảm 11% so với quý trước xuống 305 triệu USD do khối lượng hàng giao sang Trung Đông giảm đã lấn át mức tăng trưởng doanh số tại Mỹ.
• Doanh thu mảng Công nghệ Ống cuộn tăng hơn 20% so với quý trước lên 127 triệu USD. Lợi nhuận hoạt động tăng 29%, trong khi EBITDA điều chỉnh của mảng tăng 23%.
• Tổng giá trị đơn hàng tồn đọng đạt 615,6 triệu USD, tăng khoảng 160 triệu USD so với quý 2. Giá trị đơn hàng tồn đọng mảng ống cuộn tăng gần gấp đôi, chủ yếu nhờ các đơn hàng từ khu vực Mỹ Latinh.
• Cactus dự định đầu tư khoảng 100 triệu USD vào một nhà máy sản xuất Công nghệ Ống cuộn tại Trung Đông, dự kiến bắt đầu đi vào hoạt động vào năm 2029.

Dữ liệu tài chính quan trọng

Kết quả kinh doanh và hoạt động

Mảng Kiểm soát Áp suất

Doanh thu mảng Kiểm soát Áp suất giảm do lượng sản phẩm giao sang Trung Đông sụt giảm vượt quá mức tăng trưởng hoạt động tại Mỹ. Lợi nhuận hoạt động của mảng tăng 4% so với quý trước, và biên lợi nhuận hoạt động tăng khoảng ba điểm phần trăm.

EBITDA điều chỉnh của mảng giảm 9,8 triệu USD, tương đương 10%, nhưng biên EBITDA tăng 40 điểm cơ bản. Cơ cấu danh mục tốt hơn, khả năng sinh lời từ phụ tùng và sửa chữa cao, các biện pháp kiểm soát chi phí cùng việc hiện thực hóa hiệu quả cộng hưởng đã bù đắp cho đòn bẩy hoạt động thấp hơn và các khoản hoàn thuế quan giảm.

Cactus đã nhận được khoảng 6 triệu USD tiền hoàn thuế quan trong quý và cho biết công ty đã thu hồi phần lớn số tiền hoàn thuế dự kiến.

Số lượng đơn đặt hàng của Cactus International đã phục hồi trong quý 3 sau khi khách hàng giảm bớt hàng tồn kho trong nửa đầu năm 2026. Ban quản lý cho biết sự phục hồi diễn ra tại nhiều quốc gia Trung Đông, với thời gian giao hàng thường dao động từ 9 đến 15 tháng.

Mảng Công nghệ Ống cuộn

Mảng Công nghệ Ống cuộn hưởng lợi từ hoạt động trong nước mạnh mẽ hơn và việc tiếp tục mở rộng ra quốc tế. Lợi nhuận hoạt động tăng 9,4 triệu USD, tương đương 29%, trong khi biên lợi nhuận hoạt động tăng 230 điểm cơ bản. EBITDA điều chỉnh của mảng tăng 9,8 triệu USD, tương đương 23%, với biên EBITDA mở rộng 110 điểm cơ bản.

Ban quản lý dự kiến doanh số ngoài Mỹ sẽ chiếm khoảng 20% doanh thu mảng trong năm 2026, cao hơn gấp đôi so với tỷ lệ dưới 10% của năm 2025. Công ty cũng kỳ vọng sẽ có các lô hàng lớn đầu tiên giao cho khách hàng mảng trung nguồn theo quy trình miễn trừ PHMSA mới được phê duyệt trong quý 4.

Dự án mở rộng tại Baytown dự kiến sẽ làm tăng khoảng 20% công suất của cơ sở này. Bên cạnh đó, Cactus có kế hoạch xây dựng một nhà máy sản xuất ống cuộn tại Trung Đông nhằm thiết lập hoạt động sản xuất tại địa phương ở khu vực vốn chỉ đóng góp khoảng 2% doanh thu của FlexSteel kể từ sau thương vụ thâu tóm.

Nhà máy tại Trung Đông dự kiến sẽ tốn khoảng 100 triệu USD và được tài trợ bằng nguồn tiền tạo ra từ nội bộ. Hầu hết chi tiêu được lên kế hoạch cho năm 2027 và 2028, với các hoạt động dự kiến bắt đầu vào năm 2029.

Dự báo của Ban quản lý

• Doanh thu mảng Kiểm soát Áp suất: Ban quản lý dự kiến doanh thu quý 4 sẽ đi ngang hoặc tăng so với quý 3, nhờ hoạt động giàn khoan trên đất liền ổn định tại Mỹ và doanh số trong nước duy trì tốt.
• Biên lợi nhuận mảng Kiểm soát Áp suất: Biên EBITDA điều chỉnh dự kiến đạt 23% đến 25%, không bao gồm khoảng 4 triệu USD chi phí thù lao bằng cổ phiếu. Mức giảm dự kiến phản ánh việc không còn khoản hoàn thuế quan và cơ cấu khách hàng cũng như thiết bị không thuận lợi.
• Cactus International: Doanh số quý 4 dự kiến sẽ tương đương quý 3. Ban quản lý dự báo doanh thu năm 2027 sẽ nhìn chung đi ngang so với năm 2026, với nửa cuối năm tăng trưởng mạnh hơn nửa đầu năm.
• Doanh thu mảng Công nghệ Ống cuộn: Doanh thu quý 4 dự kiến sẽ tăng ở mức một chữ số thấp so với quý trước do sự tăng trưởng quốc tế và các lô hàng lớn sang Mỹ Latinh bù đắp cho yếu tố mùa vụ thông thường tại Bắc Mỹ.
• Biên lợi nhuận mảng Công nghệ Ống cuộn: Biên EBITDA điều chỉnh dự kiến ở mức 39% đến 41%, không bao gồm khoảng 1 triệu USD chi phí thù lao bằng cổ phiếu.
• Chi phí doanh nghiệp: EBITDA điều chỉnh của doanh nghiệp dự kiến là một khoản chi phí khoảng 6 triệu USD, không bao gồm 2 triệu USD chi phí thù lao bằng cổ phiếu.
• Chi phí vốn cả năm: Cactus đã nâng ước tính chi phí vốn ròng năm 2026 lên khoảng 65 triệu USD, bao gồm mua sắm thiết bị có thời gian cung ứng dài cho nhà máy ở Trung Đông và dự án mở rộng tại Baytown.
• Các giả định khác cho quý 4: Ban quản lý dự kiến thuế suất hiệu dụng là 24%, thuế suất cho EPS điều chỉnh khoảng 27%, và chi phí khấu hao cùng phân bổ khoảng 27 triệu USD.

Rủi ro và các vấn đề cần theo dõi

• Cactus tiếp tục phải nộp tổng mức thuế quan khoảng 75% đối với hầu hết các hàng hóa nhập khẩu từ Trung Quốc, trong khi lợi ích từ khoản hoàn thuế quan dự kiến phần lớn sẽ chấm dứt.
• Hoạt động tại Trung Đông phần lớn không bị gián đoạn, nhưng ban quản lý tiếp tục theo dõi xung đột khu vực, căng thẳng gia tăng và hoạt động của lực lượng Houthi.
• Chi phí đầu vào cao hơn có thể ảnh hưởng đến cơ cấu chi phí của mảng Công nghệ Ống cuộn trong năm 2027.
• Biên lợi nhuận quý 4 của mảng Công nghệ Ống cuộn có thể chịu ảnh hưởng từ hiệu suất sản xuất giảm trong mùa lễ hội dù đòn bẩy hoạt động đã cải thiện.
• Các đơn hàng của Cactus International có thời hạn giao hàng từ 9 đến 15 tháng, làm chậm tác động tích cực đến doanh thu từ sự phục hồi đơn đặt hàng gần đây.

Điểm nhấn phiên Hỏi & Đáp với chuyên gia phân tích

Ban quản lý cho biết dự án Baytown sẽ làm tăng khoảng 20% công suất hiện tại và đánh giá đợt mở rộng này đóng vai trò quan trọng đối với cơ hội doanh thu dài hạn của mảng Công nghệ Ống cuộn. Ban quản lý cũng kỳ vọng đà tăng trưởng quốc tế sẽ duy trì biên lợi nhuận hấp dẫn vì FlexSteel vẫn giữ được sự khác biệt trong mảng ống cuộn đường kính lớn, chịu áp suất cao.

Về Cactus International, ban quản lý cho biết đáy của lượng đơn đặt hàng đã qua. Hoạt động đặt hàng đã phục hồi đáng kể trong quý 3 tại một số quốc gia Trung Đông và dự kiến sẽ tiếp tục đà này trong quý 4 trước khi trở lại nhịp độ bình thường hơn vào năm 2027.

Ban quản lý cho rằng biên lợi nhuận vững chắc của mảng Kiểm soát Áp suất trong quý 3 là nhờ biên lợi nhuận mảng phụ tùng và sửa chữa cao hơn dự kiến cùng việc hiện thực hóa thêm hiệu quả cộng hưởng. Mức giảm dự kiến xuống biên EBITDA điều chỉnh 23%–25% trong quý 4 chủ yếu phản ánh cơ cấu khách hàng và sự cân bằng giữa doanh thu thiết bị và dịch vụ.

Đối với mảng Kiểm soát Áp suất tại Mỹ, dựa trên các cuộc thảo luận với khách hàng, ban quản lý kỳ vọng vị thế thị phần sẽ mạnh mẽ hơn cho đến hết quý 1, dù không đưa ra con số định lượng cụ thể cho mức thay đổi dự kiến.

Toàn văn cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good day, and thank you for standing by. Welcome to Cactus Q3 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference call is being recorded.

I would now like to hand the conference over to your first speaker today, Alan Boyd, Treasurer and Director of Corporate Development and Investor Relations. Please go ahead.

Alan Boyd

Thank you, and good morning. We appreciate you joining us on today's call. Our speakers will be Scott Bender, our Chairman and Chief Executive Officer; and Jay Nutt, our Chief Financial Officer. Also joining us today are Joel Bender, President; Steven Bender, Chief Operating Officer and CEO of Spoolable Technologies; Stephen Tadlock, CEO of Cactus International; and William Marsh, our General Counsel.

Please note that any comments we make on today's call regarding projections or expectations for future events are forward-looking statements covered by the Private Securities Litigation Reform Act. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC. Any forward-looking statements we make today are only as of today's date, and we undertake no obligation to publicly update or review any forward-looking statements.

In addition, during today's call, we will reference certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release.

With that, I'll turn the call over to Scott.

Scott Bender

Thanks, Alan, and good morning, everyone. Pressure Control sales declined as expected, but bookings accelerated and margins exceeded expectations on improved cost control, synergy realization and strong domestic performance.

Our Spoolable Technologies business grew sales and backlog substantially as international and domestic market momentum continued. Although the global market remains highly dynamic and uncertain, I'm confident that our business, which focuses on differentiated, highly engineered products will continue to outperform.

Some third quarter total company financial highlights include revenue of $431 million, adjusted EBITDA of $132 million, adjusted EBITDA margins of 30.6%. We closed the quarter with a cash balance of $354 million and paid a quarterly dividend of $0.15 per share. Yesterday, we announced that we're planning to construct a Spoolable Technologies manufacturing facility in the Mid East.

I'll now turn the call over to Jay Nutt, our CFO, who will review our financial results. And following his remarks, I'll provide some thoughts on our outlook for the near-term before opening the lines for Q&A. Jay?

Jay Nutt

Thank you, Scott. As Scott noted, total Q3 revenues were $431 million, down 4% sequentially. Total adjusted EBITDA of $132 million was flat from the second quarter despite the lower volume and lower contributions from tariff refunds.

For our Pressure Control segment, revenues of $305 million were down 11% sequentially, driven primarily by lower product shipments in the Middle East, which more than offset an increase in U.S. sales as domestic customers increased activity.

Operating income increased $2.4 million or 4% sequentially, with operating margins increasing approximately 3%. Operating income was reduced by approximately $9 million due to purchase price accounting adjustments that we add back to our adjusted operating results, which declined from $20 million in the second quarter. Adjusted segment EBITDA was $9.8 million or 10% lower sequentially, with margins increasing by 40 basis points.

Margins improved slightly on better mix and strength in spares and repair margins in our Cactus International business, combined with strong cost control and synergy realization, all of which offset lower operating leverage and lower tariff refunds in the quarter.

Our refunds totaled approximately $6 million in the quarter, and we've received the vast majority of the refunds that we anticipate are due.

For our Spoolable Technologies segment, revenues of $127 million increased over 20% sequentially, reflecting expanding domestic activity in a seasonally stronger quarter and continued expansion in international markets.

Operating income increased $9.4 million or 29% sequentially with operating margins increasing 230 basis points. Adjusted segment EBITDA increased $9.8 million or 23% sequentially, while margins increased by 110 basis points as operating leverage improved.

Corporate and other expenses increased by $1.3 million to $9.1 million in Q3, including $600,000 of transaction and integration costs. Adjusted corporate EBITDA moved unfavorably from $5.3 million to $6.1 million of expense on higher personnel expenses.

On a total company basis, third quarter adjusted EBITDA was $132 million, down $800,000 from Q2. Adjusted EBITDA margin for the third quarter improved to 30.6% compared to 29.5% for the second quarter. Adjustments to total company EBITDA during the third quarter included noncash charges of $7.8 million in stock-based compensation, $200,000 of inventory step-up amortization reversal due to purchase price accounting and $600,000 for transaction-related professional fees and $2.8 million of severance, primarily associated with continuing actions to right size the Cactus International organization in support of our previously communicated synergy target.

Total company backlog ended the quarter at $615.6 million, an increase of approximately $160 million from the end of the second quarter. Backlog in Cactus International business increased sequentially as anticipated as certain customers had destocked inventory in the first half of the year and commenced order placements.

Backlog in our spoolable business expanded meaningfully in the third quarter, primarily driven by continued order strength in the LatAm market. As a reminder, backlog does not include any U.S. pressure control contribution.

Depreciation and amortization expense for the third quarter was $26.8 million, which included $200,000 of amortization reversal of the step-up in inventory values resulting from the Cactus International acquisition and a combined $13.6 million of amortization expense related to intangible assets that arose from both the Cactus International and FlexSteel acquisitions.

During the third quarter, the public or Class A ownership of the company averaged and ended the period at 87%.

GAAP net income was $74 million in the third quarter versus $61 million during the second quarter. The increase was largely driven by lower purchase price accounting-related adjustments in the period.

Book tax expense during the third quarter was $21 million, resulting in an effective tax rate of 22%.

Adjusted net income and earnings per share were $78 million and $0.96 per share, respectively, during the third quarter compared to $75 million and $0.93 per share in the second quarter. Adjusted net income for the third quarter was net of a 27% tax rate applied to our adjusted pretax income.

During the quarter, we paid a quarterly dividend of $0.15 per share, resulting in a cash outflow of approximately $12 million, including related distributions to our members.

We ended the quarter with a cash balance of $354 million. This amount is net of $91 million of cash disbursed through accounts payable to finalize the Cactus International legal entity formation transactions with Baker Hughes during the quarter.

We've now concluded all legal entity formations and deferred closing activities related to the Cactus International acquisition.

The quarter end cash balance represented a sequential increase of $79 million, excluding the transaction-related outflows in the period. Net CapEx was $16.1 million during the third quarter of 2026.

In a moment, Scott will give you our fourth quarter operational outlook. Some additional financial considerations when looking ahead to the fourth quarter include an effective tax rate of 24% and an estimated tax rate for adjusted EPS of approximately 27%.

Total depreciation and amortization expense during the fourth quarter is expected to be approximately $27 million. $18 million of the amortization expense is associated with our Pressure Control segment and $9 million is in the Spoolable Technologies segment. These amounts include approximately $10 million of intangible amortization due to purchase price accounting in our Pressure Control segment and $4 million in our Spoolable Technologies segment.

We now expect our full year 2026 net CapEx to be approximately $65 million. The estimate includes the placement of orders for long lead equipment related to the Middle East Spoolable Technologies manufacturing facility and the ongoing Baytown expansion. Scott will describe the Middle East plant initiative in more detail in just a moment.

During the fourth quarter, we'll be making the annual payment related to our tax receivable agreement and related member distributions. The payment and related distributions will be approximately $25 million.

Finally, the Board has approved a quarterly dividend of $0.15 per share, which will be paid in December.

That covers the financial review, and I'll now turn the call back over to Scott.

Scott Bender

Thanks, Jay. I'd like to begin our outlook commentary with an overview of our plan to expand our Spoolable Technologies manufacturing footprint with a facility in the Mid East. There is a substantial market opportunity in the region as the Mid East offers one of the largest potential markets for spoolable pipe where steel pipe currently dominates.

FlexSteel has been successful in cultivating relationships with key customers in the region. While we have had recent success in winning awards, this market remains essentially untapped for us right now, representing only about 2% of revenue since we acquired the business.

In order to drive a step change in our sales in the Mid East, a local manufacturing presence is needed. We expect that the investment required to construct the facility will be approximately $100 million, which we anticipate being funded with internal cash generation. The majority of the capital investment will be split between 2027 and 2028 with a modest amount to be incurred in 2026, as Jay mentioned. We expect that the plant will commence operations in 2029. We provided an indication of our potential long-term revenue impact last quarter, and we'll provide further details regarding the facility as construction progresses.

I will remind you that our FlexSteel product offers customers the largest commercial spoolable pipe diameters, pressure ratings, temperature ratings to meet the wide range of customer needs, and many of our products are already fully qualified by the key customers in the region, providing confidence in our ability to penetrate the market. We're enthusiastic about taking this next step in the evolution of growth for FlexSteel.

I'll now turn to our operational outlook for the fourth quarter. During the fourth quarter, we expect Pressure Control revenue to be flat to up from the third quarter. We expect the domestic U.S. land rig counts will remain steady from today's level through the end of the year, which represents a slightly higher average activity level than seen in the third quarter and should result in resilient domestic revenues despite normal seasonal slowdowns.

We believe that Cactus International sales will remain in line with third quarter levels as we work through existing backlog. Our manufacturing operations in the Mid East have been largely uninterrupted despite the ongoing conflict and increased tensions, and we continue to monitor the situation, including the impacts of the recent Houthi activity.

Adjusted EBITDA margins in our Pressure Control segment are expected to be in the 23% to 25% range in the fourth quarter. This guidance excludes approximately $4 million of stock-based comp expense within the segment.

Margins are expected to decrease primarily due to the nonrecurrence of tariff recovery and will also be unfavorably impacted by customer mix in our Cactus International business.

Looking forward, with the increased pace of order activity in our Cactus International business in the back half of this year, we expect revenue levels for next year to be broadly flat with 2026 with the back half of 2027 being stronger than the first half.

With these orders, our work is accelerating on supply chain-related transformation and the associated cost savings we expect to achieve in the back half of 2027, which will more fully benefit 2028 results. We'll share more detail on these initiatives in the coming quarters.

We also remain encouraged by efforts to diversify sales into regions with a large installed base of legacy Vetco Gray equipment, which we expect to benefit our revenues in 2028. As it relates to our U.S. operations, the tariff situation has remained stable in the past several months, and we continue to pay approximately 75% total tariffs on the import of most of our goods from China.

Shifting to our Spoolable Technologies segment, I remain very pleased with the performance of this business. We expect revenues in the fourth quarter to be up low single digits from the third quarter as typical North American market seasonality is more than offset by continued international strength, benefiting from the timing of several large shipments into Latin America in the fourth quarter.

We expect non-U.S. sales to represent approximately 20% of sales for 2026, more than doubling from sub-10% in 2025. As we previewed on last quarter's call, we achieved a record level of orders in the third quarter and nearly doubled our backlog, which further supports the demand underwriting our plan to expand our Baytown facility.

In the fourth quarter, we also expect to make our first substantial shipments to midstream customers resulting from the newly approved FEMSA exemption process, which fast tracks approvals for larger diameter spoolable pipe and regulated midstream pipelines. We believe we are in the early stages of growth in the market that's been slow to adopt spoolable pipe for these applications.

We expect Spoolable Technologies adjusted EBITDA margins to be approximately 39% to 41% in the fourth quarter, which excludes $1 million of stock-based compensation expense. We project margins to be relatively stable in the fourth quarter as increased operating leverage is offset by higher input costs and typical holiday-related manufacturing inefficiencies. We're closely monitoring elevated input costs that may affect our cost structure next year.

Adjusted corporate EBITDA is expected to be a charge of approximately $6 million in the fourth quarter, which excludes $2 million of stock-based comp.

To close our remarks, I'd like to start by thanking our associates for sustaining such a high level of business performance this year. Both of our segments are undergoing transformational initiatives as we continue the full integration of our Cactus International business while expanding and diversifying the manufacturing footprint of our Spoolable Technologies business, all while safely executing at the high level our customers demand.

The Cactus culture is on display as our domestic business is as resilient and profitable as ever, and we are enthusiastic about the trajectory of midstream spoolable sales to come as the market digests the recent PHMSA ruling.

Our international Pressure Control business is executing well in spite of challenging market conditions brought on by the war and the business is beginning to secure meaningful orders for shipments next year to a transformed supply chain, while our international spoolable technologies business is growing rapidly.

I'm very pleased to begin the journey towards establishing a spoolable manufacturing footprint in the Mid East. As always, we'll continue to operate the business with a focus on safety, returns, margins and customer execution.

With that, I'll turn it back over to the operator, and we can begin Q&A. Operator?

Operator

[Operator Instructions] Our first question comes from the line of Arun Jayaram from JPMorgan Securities.

Phần hỏi đáp

Arun Jayaram

My question is I wanted to see if you can maybe elaborate on how the capacity expansion that you previously announced at Baytown plus this Middle East expansion will support Cactus' ability to drive volumes higher in spoolables. If we look at this year, for example, your revenue in spoolables looks to be up 23% or so. And so, I guess we're just trying to understand as we start thinking about modeling the company over a multiyear basis, what kind of volume growth could we see between this combination of Baytown where I believe you're adding some roof line maybe moving to 3 shifts and then also this Middle East expansion.

Scott Bender

What a very surprising question. So the Baytown expansion, which is currently underway, but not fully realized, will add about 20% to our Baytown capacity. And then if we take that number and divide it -- as I mentioned before, divide it by 0.6, that will give you our total potential revenue capacity or production capacity. So I'm sure you can do that math. But it has a very, very serious impact on our Spoolable Technologies revenue stream.

And I think importantly, although you didn't ask the question, unlike pressure control, the margins are not going to suffer by virtue of being more exposed to international.

Arun Jayaram

Got it. Got it. That's super helpful. Last question for me is I wanted to talk a little bit about your anticipation and where we could start to see a little bit of an order inflection in Cactus International. Obviously, a lot of security challenges kind of near term. But as you think about some of the destocking, when do you expect that to maybe soft where we could start seeing backlog grow in Cactus International?

Scott Bender

So I'll let Tadlock respond to that, if you're already seeing it.

Stephen Tadlock

Yes. So we saw that happen this quarter. So in the Q&A last quarter, I mentioned we've seen a destocking of inventory in the Middle East for the first half of the year, which we believe was driven largely by the conflict and then a strong order activity in years prior. Orders in the first half for that region had been pretty much all services related, so repairs and spares as that took priority for customers. But as we anticipated, we saw a significant recovery this quarter in multiple countries in the Middle East, not just one or two. These orders do have delivery terms of 9 to 15 months depending on what their time line is. But yes, as I said, I think that should continue in Q4 and then hopefully, we're in more of a normal pace in 2027.

Operator

Our next question comes from the line of Derek Podhaizer from Piper Sandler.

Derek Podhaizer

I guess sticking on spoolables first. Just Scott, an interesting comment to Arun's question as far as the margin profile should not suffer by virtue of international exposure. Obviously, this is an incredible growth opportunity for you guys. But maybe you can unpack that for us just a little bit more, just considering international tends to be a lower price environment, but you guys have always historically driven premium margins. So maybe just a little more color on that as far as why you're able to hold the margins that you've been used to with spoolables ever since you bought FlexSteel a few years ago.

Scott Bender

I can probably sum that up by telling you that large diameter, we still are the only spoolable company that can produce large, high-pressure diameter pipe. And so that certainly supports a margin that's consistent with what we see in the North America.

Derek Podhaizer

Got it. Okay. That's helpful. It makes sense. And then just switching over to Pressure Control. Just kind of looking back at the guide, I think you guide third quarter to be around that 23% to 25%. You came in greater than 28%. The 4Q guide went back to that original 3Q effect on the 23%, 25%. So could you just piece it together for us, maybe the drivers behind the big beat for this quarter exceeding 28% but then also why returning back down to the 23% to 25% level?

Scott Bender

Okay. Jay?

Jay Nutt

Yes. The outperformance in Q3, as I mentioned, we had some better-than-anticipated performance on spares and repairs margins, a little bit additional synergy realization accomplished from actions completed in Q2, Derek. Obviously, the tariffs we already knew about when we gave our guidance. Going into Q4, really the customer mix and the equipment versus service mix is the driver of the margin degradation quarter-over-quarter that will take us back to 23% to 25%.

Operator

Our next question comes from the line of Stephen Gengaro with Stifel.

Stephen Gengaro

A couple of things for me. I think the first one, you mentioned the Middle East penetration. And can you talk -- I think you talked about being qualified and having a lot of confidence. Is that process easier for spoolables than it is for the Pressure Control business? I mean I'm just sort of thinking about the traction you're getting there and how to think about the ramp in that market. I mean, clearly, your building facility, you're ultraconfident, but I just wanted to understand that a little better.

Scott Bender

Yes. Well, Stephen, it isn't easy, but we are much, much further along -- it's -- we knew this was coming. And so, we've developed the products and began testing well in advance. Frankly, Baker had relaxed their attention on testing requirements for customers in the Middle East and whereas spoolables did not. So we're -- I think that we'll probably be done -- all the testing is underway and going as planned so that by the end of the first quarter, beginning of the second quarter, it will be done, but we're not seeing any hiccups at all.

Stephen Gengaro

And the other question is on the U.S. pressure control piece. And I know I'm not allowed to ask you specifically about market share anymore. But when you think about the activity levels we've seen in the U.S. market, and we've seen a lot of privates kind of ramp to my knowledge, and I'm hearing some publics are as well. Historically, your share with privates was lower, but I know it improved kind of post-COVID. I'm just curious how we should think about your growth relative to overall market growth, if it's driven by privates.

Scott Bender

Well, everything you said is true. But in conversations with our customers, which is really the best proxy for us, we see that the first quarter is going to be a strong market share quarter for us. So for those of you that are wondering when we stopped reporting market share, if that was sort of foreshadowing decline, the answer is no. And I think that you'll see -- although I can't quantify that for you, I think you'll see an improved market share statistic metric by the end of the first quarter -- through the end of the first quarter.

Stephen Gengaro

Okay. And just a quick follow-up to that. And based on your numbers, clearly, the share hasn't gone down. But the -- you mentioned in the first quarter, assuming based on your history, when you do gain share, it's very sticky. So that's a comment which should hold going forward through the first quarter.

Scott Bender

Yes. Do we have any other questions? If not.

Operator

This ends our question-and-answer session, and we'll turn it back to our speakers for closing remarks.

Scott Bender

Okay. Thanks, everybody, for your attention today. Let me just sum up our conversation, and that is that our Spoolable Technologies business is doing magnificently right now with, I think, some additional products in the pipeline, which I can't really comment on right now, but some exciting news. Cactus International has hit its trough in terms of bookings. And our Pressure Control business in the U.S. has really never performed better than it's performing now despite the impact of these tariffs on our business.

So I thank you for your support and look forward to speaking to you at any time. Thank you. Have a good day.

Operator

Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.