Tidewater Inc.

What they do

Tidewater provides marine and transportation services to the global offshore energy industry, operating a diversified fleet of offshore service vessels (OSVs) including Anchor Handling Towing Supply Vessels (AHTS) and Platform Supply Vessels (PSVs). The fleet supports all phases of offshore oil and gas exploration, development, production, and abandonment, as well as windfarm construction and maintenance. Operations are managed through five geographic segments: Americas, Asia Pacific, Middle East, Europe/Mediterranean, and West Africa, with vessels moving between regions as projects dictate.

Revenue drivers

• Platform Supply Vessels (PSVs) — PSVs are a primary vessel class; day rates for the largest PSV class drove the most significant sequential day rate improvement in Q2 2026, indicating strong demand.
• Term charter contracts — Revenue primarily comes from time charter contracts ranging from months to years; weighted average leading edge day rate rose 7.5% sequentially to $24,341 in Q2 2026, showing rate momentum.
• Spot charters and ancillary services — Spot market charters and specialized services such as pipe laying, cable laying, and subsea support contribute revenue, though term contracts are the primary source.
• Geographic segments — Revenue is diversified across five regions; the Middle East is a principal region, contributing high utilization and day rates in Q2 2026 despite conflict-related costs.

Recent performance

In Q2 2026, revenue was $342.3 million, up 4.9% sequentially, with net income of $21.7 million and Adjusted EBITDA of $133.8 million. Average day rate increased 2.9% to $22,938, and utilization was higher than expected. For the six months ended June 30, 2026, revenue totaled $668.5 million and net income was $27.8 million, compared to $674.9 million and $115.6 million in the same period of 2025. Full-year 2025 revenue was $1.35 billion with net income of $333.5 million, and the balance sheet as of June 30, 2026 showed cash of $613.5 million and long-term debt of $647.5 million.

Strategy

Tidewater is pursuing growth through M&A, notably the planned $500.0 million acquisition of Wilson Sons Ultratug, which adds 22 PSVs in Brazil, expected to close around September 1, 2026. The company is focused on fleet efficiency and cost management, as seen in the Vessel Realignment that consolidated ownership into a U.S. entity, generating a deferred tax benefit. It has also issued $650.0 million in 9.125% Senior Notes due 2030 and established a $250.0 million revolving credit facility to refinance debt and fund operations. Shareholder returns are supported by a $500.0 million share repurchase program approved in August 2025, though no repurchases have been made under it as of June 30, 2026.

Risks

• Oil and gas price volatility — Customer capital spending, and thus demand for services, depends on oil and gas prices, which can decline due to supply and demand shifts.
• Regional conflict disruption — The Middle East conflict has elevated operating costs, and while reimbursements are being pursued, disruptions could materially impact operations.
• Geographic concentration and mobility — While vessels can move between regions, local conditions and customer projects may limit flexibility and affect utilization and pricing.
• Acquisition integration execution — Closing and integrating the Wilson Sons acquisition involves regulatory approvals and debt assumptions, which could cause delays or cost overruns.

Outlook

Management updated 2026 revenue guidance to $1.42 billion to $1.47 billion and gross margin guidance to 49% to 50% pro forma for the WSUT acquisition. They expect the acquisition to close around September 1, 2026, and anticipate continued offshore activity pickup into 2027. Conflict-related costs in the Middle East are expected to persist but are mitigated by structural wage adjustments and reimbursement claims.