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Cactus, Inc.

Cactus, Inc.WHDEarnings & Financial Report

NYSE · Industrials · Oil & Gas Field Machinery & Equipment

Cactus Club Cafe is a Canadian-owned chain of premium casual restaurants that originated in North Vancouver, British Columbia. The chain has since expanded to 34 locations throughout Canada, with other locations throughout British Columbia, Alberta, Saskatchewan, Ontario and the United States

What changed in Cactus, Inc.'s 10-K — 2024 vs 2025

Top changes in Cactus, Inc.'s 2025 10-K

270 paragraphs added · 245 removed · 185 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

55 edited+16 added−18 removed59 unchanged
Nutt Executive Vice President, Chief Financial Officer, and Treasurer William Marsh Executive Vice President, General Counsel and Corporate Secretary Information About Our Board of Directors Name Position Scott Bender Chief Executive Officer, Chairman of the Board and Director of Cactus, Inc. Joel Bender President and Director of Cactus, Inc.
Nutt Executive Vice President and Chief Financial Officer William Marsh Executive Vice President, General Counsel and Corporate Secretary Information About Our Board of Directors Name Position Scott Bender Chief Executive Officer, Chairman of the Board and Director of Cactus, Inc. Joel Bender President and Director of Cactus, Inc.
We seek to differentiate ourselves from our competitors by delivering the highest‑quality services and equipment possible, coupled with superior execution and operating efficiency in a safe working environment.
We seek to differentiate ourselves from our competitors by timely delivering the highest‑quality services and equipment possible, coupled with superior execution and operating efficiency in a safe working environment.
Our commitment is to nurture a workplace culture that values every individual, and empowers everyone to contribute their unique perspectives. We are dedicated to fostering an environment where discrimination has no place. This commitment is reflected in every aspect of our business—from recruitment and promotion practices to employee development initiatives and supplier partnerships.
Our commitment is to nurture a workplace culture that values every individual, and empowers everyone to contribute their unique perspectives. We are dedicated to fostering an environment where discrimination has no place. This commitment is reflected in every aspect of our business—from recruitment and promotion practices to associate development initiatives and supplier partnerships.
We completed the acquisition on a cash-free, debt-free basis and paid total cash consideration of $658.6 million which included the initial purchase consideration, final adjustments for closing working capital, cash on hand and indebtedness adjustments, and earn-out payments made in 2024 as set forth in the related merger agreement (the “Merger Agreement”).
We completed the acquisition on a cash-free, debt-free basis and paid total cash consideration of $658.6 million which included the initial purchase consideration, final adjustments for closing working capital, cash on hand and indebtedness adjustments, and earn-out payments made in 2024 as set forth in the related merger agreement.
We believe that our unwavering focus on training and development not only fosters a safer work environment but also creates pathways for internal promotions, boosts employee morale, and strengthens retention across the organization. Workplace Culture. We believe our workplace culture is fundamental to our success, driving innovation, creativity, and sustainable growth.
We believe that our unwavering focus on training and development not only fosters a safer work environment but also creates pathways for internal promotions, boosts associate morale, and strengthens retention across the organization. Workplace Culture. We believe our workplace culture is fundamental to our success, driving innovation, creativity, and sustainable growth.
To support career advancement, our development plans equip individuals with the technical expertise needed to perform their roles with the highest levels of safety and precision. For employees requiring specialized skills, knowledge, or certifications, we provide access to external training opportunities tailored to their professional growth.
To support career advancement, our development plans equip individuals with the technical expertise needed to perform their roles with the highest levels of safety and precision. For associates requiring specialized skills, knowledge, or certifications, we provide access to external training opportunities tailored to their professional growth.
Based on the most recent statistics available from the International Association of Drilling Contractors, our TRIR statistics are in line with the industry average. We are committed to the health, safety and wellness of our employees. We provide our employees and their families access to various flexible and convenient health and wellness programs.
Based on the most recent statistics available from the International Association of Drilling Contractors, our TRIR statistics are in line with the industry average. We are committed to the health, safety and wellness of our associates. We provide our associates and their families access to various flexible and convenient health and wellness programs.
These efforts ensure we maintain a diverse and highly skilled candidate pool in every region where we operate. Training and Development. We are deeply committed to the training and development of our employees, with a special emphasis on those in field, plant, and branch operations.
These efforts ensure we maintain a diverse and highly skilled candidate pool in every region where we operate. Training and Development. We are deeply committed to the training and development of our associates, with a special emphasis on those in field, plant, and branch operations.
There can be no assurance, however, that others will not independently obtain similar information or otherwise gain access to our trade secrets. 4 Table of Contents Cyclicality We are substantially dependent on conditions in the oil and gas industry, including the level of exploration, development and production activity of, and the corresponding capital spending by oil and natural gas exploration and production companies.
There can be no assurance, however, that others will not independently obtain similar information or otherwise gain access to our trade secrets. Cyclicality We are substantially dependent on conditions in the oil and gas industry, including the level of exploration, development and production activity of, and the corresponding capital spending by, oil and natural gas exploration and production companies.
In the Spoolable Technologies segment, we compete with companies who offer spoolable products, including Baker Hughes, Mattr, NOV and select other companies, and companies who offer traditional steel line pipe, including Tenaris, Vallourec, and a large number of other line pipe manufacturers and distributors.
In the Spoolable Technologies segment, we compete with companies who offer spoolable products, including Baker Hughes, Mattr, NOV and select other companies, as well as companies who offer traditional steel line pipe, including Tenaris, Vallourec, and a large number of other line pipe manufacturers and distributors.
We believe our materials and services vendors have the capacity to meet additional demand should we require it, although at potentially higher costs and with extended deliveries. Manufacturing Our manufacturing and production facilities within our Pressure Control operating segment are located in Bossier City, Louisiana and Suzhou, China.
We believe our materials and services vendors have the capacity to meet additional demand should we require it, although at potentially higher costs and with extended deliveries. Manufacturing Our manufacturing and production facilities within our Pressure Control operating segment are located in Bossier City, Louisiana, Suzhou, China and Hai Duong, Vietnam.
We believe the competitive factors in the markets we serve include technical features, equipment availability, work force competency, efficiency, safety record, reputation, continuity of management, and price. Additionally, projects are often awarded on a bid basis, which tends to create a highly competitive environment.
We believe the competitive factors in the markets we serve include technical features, equipment availability, work force competency, efficiency, safety record, reputation, continuity of management, and price. Additionally, projects are often 5 Table of Contents awarded on a bid basis, which tends to create a highly competitive environment.
Our production facility in China is configured to efficiently produce our range of pressure control products and components for less time-sensitive, higher-volume orders. The Suzhou facility assembles and tests finished and semi-finished machined components before shipment to the United States, Australia and other international locations.
Our production facility in China is configured to efficiently produce our range of pressure control products and components for less time-sensitive, higher-volume orders. The Suzhou facility assembles and tests finished and semi-finished machined components before shipment to the United 4 Table of Contents States, Australia and other international locations.
These service centers support our field services and provide equipment assembly and repair services. We also provide rental and service operations in the Middle East. Pressure Control manufacturing and production facilities are located in Bossier City, Louisiana and Suzhou, China.
These service centers support our field services and provide equipment assembly and repair services. We also provide rental and service operations in the Middle East. Pressure Control manufacturing and production facilities are located in Bossier City, Louisiana, Suzhou, China and Hai Duong, Vietnam.
Although both facilities can produce our full range of products, our Bossier City facility has advanced production capabilities and is designed to support time-sensitive and rapid turnaround of made-to-order equipment, while our facility in China is optimized for longer lead time orders and outsources its machining requirements.
Although all facilities can produce our full range of products, our Bossier City facility has advanced production capabilities and is designed to support time-sensitive and rapid turnaround of made-to-order equipment, while our facilities in China and Vietnam are optimized for longer lead time orders and outsources its machining requirements.
Executive Officers and Directors The following tables set forth certain information regarding our Executive Officers and Directors as of February 25, 2025: Information About Our Executive Officers Name Position Scott Bender Chief Executive Officer, Chairman of the Board and Director Joel Bender President and Director Steven Bender Chief Operating Officer Stephen Tadlock Executive Vice President, Chief Executive Officer of the Spoolable Technologies segment Jay A.
Executive Officers and Directors The following tables set forth certain information regarding our Executive Officers and Directors as of February 25, 2026: Information About Our Executive Officers Name Position Scott Bender Chief Executive Officer, Chairman of the Board and Director Joel Bender President and Director Steven Bender Chief Operating Officer Stephen Tadlock Executive Vice President, Chief Executive Officer of the Spoolable Technologies segment, and Chief Executive Officer of Cactus International Jay A.
Further, it could increase our customers’ costs of compliance and doing business, and otherwise adversely affect the hydraulic fracturing services for which they contract, which could negatively impact demand for our products. 6 Table of Contents Climate Change.
Further, it could increase our customers’ costs of compliance and doing business, and otherwise adversely affect the hydraulic fracturing services for which they contract, which could negatively impact demand for our products. Climate Change.
Pressure Control The Pressure Control segment designs, manufactures, sells and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand. Products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion and production phases of our customers’ wells.
See discussion below of each operating segment. Pressure Control The Pressure Control segment designs, manufactures, sells and rents a range of wellhead and pressure control equipment under the Cactus Wellhead brand. Products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion and production phases of our customers’ wells.
The facilities are licensed to the latest American Petroleum Institute (“API”) 6A specification for wellheads and valves and API Q1 and ISO 9001:2015 quality management systems. The Bossier City facility also has the ability to perform frac rental equipment remanufacturing.
Excluding the new plant in Vietnam, the facilities are licensed to the latest American Petroleum Institute (“API”) 6A specification for wellheads and valves and API Q1 and ISO 9001:2015 quality management systems. The Bossier City facility also has the ability to perform frac rental equipment remanufacturing.
Human Capital Management As of December 31, 2024, we employed approximately 1,600 people worldwide, of which over 100 were employed outside of the United States, mainly in Australia and China. We are not a party to any collective bargaining agreements and have not experienced any strikes or work stoppages.
Human Capital Management As of December 31, 2025, we employed over 1,500 people worldwide, of which over 100 were employed outside of the United States, mainly in Australia, China and Vietnam. We are not a party to any collective bargaining agreements and have not experienced any strikes or work stoppages.
Pursuant to the Cactus Companies LLC Agreement, owners of CC Units are entitled to redeem their CC Units for shares of Cactus Inc.’s Class A common stock on a one-for-one basis, which would result in a corresponding increase in Cactus Inc.’s membership interest in Cactus Companies and an increase in the number of shares of Class A common stock outstanding.
Pursuant to the Cactus Companies LLC Agreement, owners of CC Units are entitled to redeem their CC Units for shares of Cactus Inc.’s Class A common stock, par value $0.01 per share ("Class A common stock") on a one-for-one basis, which would result in a corresponding increase in Cactus Inc.’s membership interest in Cactus Companies and an increase in the number of shares of Class A common stock outstanding.
Our Suzhou subsidiary is wholly-owned, and its facility is staffed by Cactus employees, which we believe is a key factor in sustaining high quality and dependable deliveries. Our manufacturing facility within our Spoolable Technologies operating segment is located in Baytown, Texas. Using proprietary-designed manufacturing equipment, we produce pipe products in accordance with industry standards.
Our Suzhou and Vietnam subsidiaries are wholly-owned, and the facilities are staffed by Cactus employees, which we believe is a key factor in sustaining high quality and dependable deliveries. Our manufacturing facility within our Spoolable Technologies operating segment is located in Baytown, Texas. Using proprietary-designed manufacturing equipment, we produce pipe products in accordance with industry standards.
The level of exploration, development and production activity is directly affected by trends in oil and natural gas prices, which have historically been volatile, and by the availability of capital and the associated capital spending discipline exercised by customers.
The level of exploration, development and production activity is directly affected by trends in oil and natural gas prices, which have historically been volatile, and by the availability of capital and the associated capital spending discipline exercised by customers in response to existing and anticipated prices of crude oil and natural gas.
During fiscal year 2024, our Pressure Control segment reported a TRIR of 0.81, which compares to 1.19 in 2023, with no work-related fatalities in either year. Our Spoolable Technologies segment reported a TRIR of 1.26 for fiscal year 2024, compared to 0.98 in 2023, with no work-related fatalities.
During fiscal year 2025, our Pressure Control segment reported a TRIR of 1.49, which compares to 0.81 in 2024, with no work-related fatalities in either year. Our Spoolable Technologies segment reported a TRIR of 0.79 for fiscal year 2025, compared to 1.26 in 2024, with no work-related fatalities.
Since our IPO, 49.1 million CC Units (including CW Units prior to the CC Reorganization) and a corresponding number of shares of Class B common stock have been redeemed in exchange for shares of Class A common stock.
Since our IPO through December 31, 2025, 49.6 million CC Units (including CW Units prior to the CC Reorganization) and a corresponding number of shares of Class B common stock have been redeemed in exchange for shares of Class A common stock.
For the year ended December 31, 2024, we derived 75% of our total revenues from the sale of our products, 9% from rentals and 16% from field service and other. In 2023, we derived 74% of our total revenues from the sale of our products, 10% from rentals and 16% from field service and other.
In 2024, we derived 75% of our total revenues from the sale of our products, 9% from rentals and 16% from field service and other. In 2023, we derived 74% of our total revenues from the sale of our products, 10% from rentals and 16% from field service and other.
For the years ended December 31, 2024 and 2023, one customer represented 15% and 10%, respectively, of total Company revenues, with both operating segments reporting revenues with this customer. No customer represented more than 10% of total Company revenues for the year ended December 31, 2022. Competition The markets in which we operate are highly competitive.
For the years ended December 31, 2025, 2024, and 2023 one customer represented 17%, 15% and 10%, respectively, of total Company revenues, with both operating segments reporting revenues with the customer. Competition The markets in which we operate are highly competitive.
The API licenses and certifications expire every three years and are renewed upon successful completion of annual audits. Our current API licenses and certifications for our Pressure Control segment are published on our website under the “Quality Assurance & Control” section at www.CactusWHD.com.
The API licenses and certifications expire every three years and are renewed upon successful completion of annual audits. Our current licenses and certifications are published on our website at www.CactusWHD.com.
Doing so may materially affect our operational costs. We also cannot guarantee that changes to the standards would not lead to the rescission of our licenses should we be unable to make the changes necessary to meet the new standards. Loss of our API licenses could materially affect demand for these products. Hydraulic Fracturing.
We also cannot guarantee that changes to the standards would not lead to the rescission 6 Table of Contents of our licenses should we be unable to make the changes necessary to meet the new standards. Loss of our API licenses could materially affect demand for these products. Hydraulic Fracturing. Most of our customers utilize hydraulic fracturing in their operations.
Rental and field service and other revenues are closely correlated with revenues from product sales, as items sold usually have an associated rental and service component. Our Revenues Our revenues are derived from three sources: products, rentals, and field service and other. Product revenues are derived from the sale of wellhead systems, production trees and spoolable pipe and fittings.
Rental and field service and other revenues are closely correlated with revenues from product sales, as items sold usually have an associated rental and service component. 3 Table of Contents Our Revenues Our revenues are derived from three sources: products, rentals, and field service and other.
Holders of Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or our amended and restated certificate of incorporation. Cactus WH Enterprises, LLC (“Cactus WH Enterprises”) is the largest CC Unit Holder.
Holders of Class A common stock and Class B common stock vote together as a single class on all 1 Table of Contents matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or our amended and restated certificate of incorporation.
We began operating in August 2011 following the formation of Cactus Wellhead, LLC (“Cactus LLC”) in part by Scott Bender and Joel Bender, who have owned or operated wellhead manufacturing businesses since the late 1970s.
We began operating in August 2011 following the formation of Cactus Wellhead, LLC (“Cactus LLC”) in part by Scott Bender and Joel Bender, who have owned or operated wellhead manufacturing businesses since the late 1970s. "The Company" is primarily engaged in the design, manufacture, sale and rental of highly engineered pressure control and spoolable pipe technologies.
Our workforce comprises a diverse associate group, with approximately 10% women and approximately 46% of our workforce representing a minority population. By cultivating a diverse environment, we strengthen our organization, enrich our workplace culture, and ensure long-term success. Compensation and Benefits.
Our workforce comprises a diverse associate group, with approximately 12% women and approximately 49% of our workforce representing a minority population. By cultivating a diverse environment, we strengthen our organization, enrich our workplace culture, and ensure long-term success. Compensation and Benefits. We provide comprehensive compensation and benefits programs thoughtfully designed to address the needs of our associates and their families.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Recent Developments and Trends” for a discussion of trends in market demand. 3 Table of Contents Costs of Conducting Our Business The principal elements of cost of sales for our products are the direct and indirect costs to manufacture and supply our products, including labor, materials, machine time, tariffs and duties, freight and lease expenses related to our facilities.
Costs of Conducting Our Business The principal elements of cost of sales for our products are the direct and indirect costs to manufacture and supply our products, including labor, materials, machine time, tariffs and duties, freight and lease expenses related to our facilities.
Following the completion of the CC Reorganization, CC Unit Holders own one share of our Class B common stock for each CC Unit such CC Unit Holder owns and Cactus Companies is the sole member of Cactus LLC.
Holders of CC Units other than Cactus Inc. (such holders, "CC Unit Holders") own one share of Cactus Inc.'s Class B common stock, par value $0.01 per share ("Class B common stock"), for each CC Unit such CC Unit Holder owns and Cactus Companies is the sole member of Cactus LLC.
Increased regulation and attention given to the hydraulic fracturing process could lead to greater opposition to oil and gas production activities using hydraulic fracturing techniques. Since 2021, the Texas Railroad Commission, which regulates the state’s oil and gas industry, has suspended the use of deep wastewater disposal wells in certain areas of oil-producing counties in West Texas.
Since 2021, the Texas Railroad Commission, which regulates the state’s oil and gas industry, has suspended the use of deep wastewater disposal wells in certain areas of oil-producing counties in West Texas.
CC Reorganization and Current Ownership Structure On February 27, 2023, in order to facilitate the Merger with HighRidge, an internal reorganization (the “CC Reorganization”) was completed in which Cactus Companies, LLC (“Cactus Companies”), a wholly-owned subsidiary of Cactus Inc., acquired all of the outstanding units representing limited liability ownership interests in Cactus LLC (“CW Units”), the operating subsidiary of Cactus Inc., in exchange for an equal number of units representing limited liability company interests in Cactus Companies (“CC Units”).
Cactus Companies, LLC (“Cactus Companies”), a wholly-owned subsidiary of Cactus Inc., acquired all of the outstanding units representing limited liability ownership interests in Cactus LLC (“CW Units”), the operating subsidiary of Cactus Inc., in exchange for an equal number of units representing limited liability company interests in Cactus Companies (“CC Units”).
We also invest in our employees’ professional development by offering tuition reimbursement in certain circumstances, enabling continued growth and skill development. Through this holistic approach to compensation and benefits, we aim to create a supportive and empowering environment that fosters employee satisfaction, enhances retention, and ensures the long-term success of both our employees and the organization. Health and Safety.
Through this holistic approach to compensation and benefits, we aim to create a supportive and empowering environment that fosters associate satisfaction, enhances retention, and ensures the long-term success of both our associates and the organization. Health and Safety.
We also provide rental and service operations in the Middle East and other select international markets. Our primary manufacturing and production facilities are in Bossier City, Louisiana, Baytown, Texas and Suzhou, China. Our corporate headquarters are located in Houston, Texas.
Additionally, we offer repair and refurbishment services as appropriate. We operate through service centers and pipe yards located in the United States, Canada and Australia. We also provide rental and service operations in the Middle East and other select international markets. Our primary manufacturing and production facilities are in Bossier City, Louisiana, Baytown, Texas and Suzhou, China.
Rental revenues are primarily derived from the rental of equipment used during the completion process, the repair of such equipment and the rental of equipment or tools used to install wellhead equipment or spoolable pipe. Field service and other revenues are primarily earned when we provide installation and other field services for both product sales and equipment rental.
Product revenues are derived from the sale of wellhead systems, production trees and spoolable pipe and fittings. Rental revenues are primarily derived from the rental of equipment used during the completion process, the repair of such equipment and the rental of equipment or tools used to install wellhead equipment and spoolable pipe.
These concerns have led to several regulatory and governmental initiatives in the United States to restrict the hydraulic fracturing process, which could have an adverse impact on our customers’ completions or production activities. Although we do not conduct hydraulic fracturing, certain of our products are used in hydraulic fracturing.
Environmental concerns have been raised regarding the potential impact of hydraulic fracturing and the resulting wastewater disposal on underground water supplies and seismic activity. These concerns have led to several regulatory and governmental initiatives in the United States to restrict the hydraulic fracturing process, which could have an adverse impact on our customers’ completions or production activities.
As of December 31, 2024, Cactus Inc. owned 85.6% and CC Unit Holders owned 14.4% of Cactus Companies, which was based on 68.2 million shares of Class A common stock issued and outstanding and 11.4 million shares of Class B common stock issued and outstanding. Cactus WH Enterprises held approximately 12.8% of our voting power as of December 31, 2024.
As of December 31, 2025, Cactus Inc. owned 86.3% and CC Unit Holders owned 13.7% of Cactus Companies, which was based on approximately 68.9 million shares of Class A common stock issued and outstanding and approximately 11.0 million shares of Class B common stock issued and outstanding.
These laws and regulations include, among others: • the Federal Water Pollution Control Act (the “Clean Water Act”); • the Clean Air Act; • the Comprehensive Environmental Response, Compensation and Liability Act; • the Resource Conservation and Recovery Act; • the Occupational Safety and Health Act; and • national and local environmental protection laws in Australia, China, Canada and the Middle East. 5 Table of Contents New, modified or stricter enforcement of environmental laws and regulations could be adopted or implemented that may significantly increase our compliance costs, pollution mitigation costs, or the cost of any remediation of environmental contamination that may become necessary, and these costs could be material.
These laws and regulations include, among others: • the Federal Water Pollution Control Act (the “Clean Water Act”); • the Clean Air Act; • the Comprehensive Environmental Response, Compensation and Liability Act; • the Resource Conservation and Recovery Act; • the Occupational Safety and Health Act; and • national and local environmental protection laws in Australia, China, Canada and the Middle East.
Historically, insurance rates have been subject to various market fluctuations that may result in less coverage, increased premium costs, or higher deductibles or self‑insured retentions.
We carry a variety of insurance coverages for our operations, and we are partially self‑insured for certain claims, in amounts that we believe to be customary and reasonable. Historically, insurance rates have been subject to various market fluctuations that may result in less coverage, increased premium costs, or higher deductibles or self‑insured retentions.
Insurance and Risk Management We rely on customer indemnifications and third‑party insurance as part of our risk mitigation strategy. However, our customers may be unable to satisfy indemnification claims against them. In addition, we indemnify our customers against certain claims and liabilities resulting or arising from our provision of goods or services to them.
Insurance and Risk Management We rely on customer indemnifications and third‑party insurance as part of our risk mitigation strategy. However, our customers may be unable to satisfy indemnification claims against them or are not always willing to provide adequate indemnifications. Additionally, state laws may not always allow indemnifications we obtain or extend to be enforced.
Recognizing the importance of work-life balance, we provide paid time off, family leave, and paid maternity and paternity leave. Our commitment to supporting families extends further with access to family care resources and personal legal services insurance. Additionally, employee assistance programs are available to help navigate personal and professional challenges.
Associates also have access to company-sponsored long- and short-term disability coverage, accident and critical illness insurance, and resources to support overall well-being. Recognizing the importance of work-life balance, we provide paid time off, family leave, and paid maternity and paternity leave. Our commitment to supporting families extends further with access to family care resources and personal legal services insurance.
The current licenses and certifications for our Spoolable Technologies segment can be found under the “HSEQ” section of our FlexSteel website at www.flexsteelpipe.com. API’s standards are subject to revision, however, and there is no guarantee that future amendments or substantive changes to the standards would not require us to modify our operations or manufacturing processes to meet the new standards.
API’s standards are subject to revision, however, and there is no guarantee that future amendments or substantive changes to the standards would not require us to modify our operations or manufacturing processes to meet the new standards. Doing so may materially affect our operational costs.
Cactus WH Enterprises is a Delaware limited liability company owned by Scott Bender, Joel Bender, Steven Bender and certain other employees.
Cactus WH Enterprises, LLC (“Cactus WH Enterprises”) is the largest CC Unit Holder. Cactus WH Enterprises is a Delaware limited liability company owned by Scott Bender, Joel Bender, and Steven Bender, each of whom is an executive officer of Cactus Inc.
We provide comprehensive compensation and benefits programs thoughtfully designed to address the diverse needs of our employees and their families. Our approach goes beyond offering competitive salaries and wages, incorporating a wide range of benefits to promote financial security, health, wellness, and professional growth.
Our approach goes beyond offering competitive salaries and wages, incorporating a wide range of benefits to promote financial security, health, wellness, and professional growth. Our financial benefits include annual bonuses and retirement plans, such as a 401(k), to help associates build long-term financial stability.
To promote health and wellness, we offer competitive healthcare and insurance options, including health savings accounts partially funded by the Company and standard flexible spending accounts. Employees also have access to company-sponsored long- and short-term disability coverage, accident and critical illness insurance, and resources to support overall well-being.
We also utilize targeted equity-based grants with vesting conditions to support the retention of key personnel, aligning their success with the Company's growth. To promote health and wellness, we offer competitive healthcare and insurance options, including health savings accounts partially funded by the Company and standard flexible spending accounts.
In 2022, we derived 66% of our total revenues from the sale of our products, 14% from rentals and 20% from field service and other. We have predominantly domestic operations and sales, but also generate revenues in Australia, Canada and other select international markets.
We have predominantly domestic operations and sales, but also generate revenues in Australia, Canada and other select international markets. As a result of the Baker Hughes Transaction, we expect that a greater portion of our operations and sales will be attributable to international markets, particularly the Middle East.
Our insurance may not be sufficient to cover any particular loss or may not cover all losses. We carry a variety of insurance coverages for our operations, and we are partially self‑insured for certain claims, in amounts that we believe to be customary and reasonable.
We indemnify our customers against certain claims and liabilities resulting or arising from our provision of goods or services to them. Our insurance may not be sufficient to cover any particular loss or may not cover all losses.
In connection with the CC Reorganization, Cactus Inc., Cactus Acquisitions and the remaining owners of CC Units entered into the Amended and Restated Limited Liability Company Operating Agreement of Cactus Companies (the “Cactus Companies LLC Agreement”), which contains substantially the same terms and conditions as the Second Amended and Restated Limited Liability Company Operating Agreement of Cactus LLC (the “Cactus Wellhead LLC Agreement”), which was the limited liability company operating agreement of Cactus LLC prior to the CC Reorganization.
(directly and through a wholly owned subsidiary) and the other owners of CC Units entered into the Amended and Restated Limited Liability Company Operating Agreement of Cactus Companies (the “Cactus Companies LLC Agreement”), which provides for Cactus Inc. to be responsible for all operational, management and administrative decisions relating to Cactus Companies’ business.
Cactus Inc. is a holding company whose only material asset is a direct and indirect equity interest consisting of CC Units following the completion of the CC Reorganization (which were CW Units from the IPO until the CC Reorganization).
Cactus Inc. is a holding company whose only material assets are CC Units, which Cactus Inc. holds both directly and indirectly. Cactus Inc. is the sole managing member of Cactus Companies. Cactus Inc.
We also provide field services for all of our products and rental items to assist with the installation, maintenance and handling of the equipment. Additionally, we offer repair and refurbishment services as appropriate. We operate through service centers and pipe yards located in the United States, Canada and Australia.
Our products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion and production phases of our customers’ wells. We also provide field services for all of our products and rental items to assist with the installation, maintenance and handling of the equipment.
Removed
Cactus Inc. and its consolidated subsidiaries (the “Company,” “we,” “us,” “our” and “Cactus”) are primarily engaged in the design, manufacture, sale and rental of highly engineered pressure control and spoolable pipe technologies. Our products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion and production phases of our customers’ wells.
Added
In addition, a new plant is commencing production in Vietnam. Our corporate headquarters are located in Houston, Texas. On January 1, 2026, the Company acquired 65% of Baker Hughes Pressure Control LLC, which holds Baker Hughes Company's former surface pressure control business. See "Cactus International Joint Venture with Baker Hughes" below.
Removed
Subsequent to the Merger, FlexSteel Holdings, Inc. was converted into a limited liability company and is now named FlexSteel Holdings, LLC (“FlexSteel”). Cactus Inc. contributed HighRidge to Cactus Acquisitions LLC (“Cactus Acquisitions”), a newly created entity, whereby HighRidge was converted into a limited liability company. Lastly, Cactus Acquisitions contributed FlexSteel to Cactus Companies.
Added
Current Ownership Structure On February 27, 2023, an internal reorganization (the “CC Reorganization”) was completed to facilitate the Merger.
Removed
Cactus Inc. was the sole managing member of Cactus LLC upon completion of our IPO until the CC Reorganization and became the sole managing member of Cactus Companies upon completion of the CC Reorganization.
Added
Cactus WH Enterprises held approximately 12.1% of our voting power as of December 31, 2025.
Removed
Cactus Inc. was responsible for all operational, management and administrative decisions relating to Cactus LLC’s business for the period from completion of our IPO until the CC Reorganization and for the Cactus Companies’ business for periods after the CC Reorganization.
Added
The following diagram indicates our simplified ownership structure as of December 31, 2025: Cactus International Joint Venture with Baker Hughes On January 1, 2026 (the “Closing Date”), Baker Hughes Holdings LLC ("Baker Hughes Holdings") and certain of its affiliates sold 65% of the limited liability company membership interests ("Membership Interests") in Baker Hughes Pressure Control LLC (the "Joint Venture" or "Cactus International"), which holds Baker Hughes Company's former surface pressure control business (the "Acquired Business") to Cactus UK Holding Limited (the “Cactus Member”), a subsidiary of Cactus Companies, for a cash purchase price of $344.5 million, subject to certain working capital, cash, debt, capital expenditure and other customary adjustments (the "Baker Hughes Transaction"). 2 Table of Contents For so long as Baker Hughes Pressure Control Holdings LLC (the "Baker Member") continues to hold Membership Interests, the Cactus Member shall cause the Joint Venture to operate its business generally in the ordinary course.
Removed
From the completion of our IPO until the CC Reorganization, pursuant to the Cactus Wellhead LLC Agreement, owners of CW Units were entitled to redeem their CW Units for shares of Cactus Inc.’s Class A common stock, par value $0.01 per share (“Class A common stock”) on a one-for-one basis, which would have resulted in a corresponding increase in Cactus Inc.’s membership interest in Cactus LLC and an increase in the number of shares of Class A common stock outstanding.
Added
Certain actions of the Board of Directors of the Joint Venture require the affirmative vote of at least one director appointed by the Baker Member.
Removed
After the CC Reorganization, we refer to the owners of CC Units, other than Cactus Inc.
Added
Baker Hughes Company ("Baker Hughes Company") and the Company will have specific non-compete restrictions with respect to surface pressure control applications in certain countries, and the members of the Joint Venture are subject to certain transfer restrictions with respect to the Membership Interests.
Removed
(along with their permitted transferees), as “CC Unit Holders.” From the completion of our IPO until the CC Reorganization, CW Unit Holders owned one share of our 1 Table of Contents Class B common stock, par value $0.01 per share (“Class B common stock”) for each CW Unit such CW Unit Holder owned and, upon the completion of the CC Reorganization, such CW Unit Holders ceased to be holders of CW Units and, instead, became holders of a number of CC Units equal to the number of CW Units such CW Unit Holders held immediately prior to the completion of the CC Reorganization.
Added
From and after the second anniversary of the Closing Date, the Baker Member has the right to sell to either the Joint Venture or the Cactus Member, and the Cactus Member has the right to purchase or cause the Joint Venture to purchase, all of the Membership Interests held directly or indirectly by Baker Hughes Company.
Removed
The following diagram indicates our simplified ownership structure as of December 31, 2024: 2 Table of Contents Our Products and Services We have two operating segments consisting of Pressure Control and Spoolable Technologies. See discussion below of each operating segment.
Added
The purchase price will be based on an enterprise value of the Joint Venture using a multiple of six times its trailing twelve month ("TTM") Adjusted EBITDA (as defined and calculated pursuant to the Amended and Restated Limited Liability Company Agreement of the Joint Venture, entered into on the Closing Date by the Joint Venture, the Cactus Member, the Baker Member, Cactus Inc. and Baker Hughes Company (the "Joint Venture LLC Agreement")), subject to a maximum valuation of $660.0 million, and if the Cactus Member elects to purchase or cause the Joint Venture to purchase the Membership Interests, a minimum valuation of $530.0 million applies.
Removed
Most of our customers utilize hydraulic fracturing in their operations. Environmental concerns have been raised regarding the potential impact of hydraulic fracturing and the resulting wastewater disposal on underground water supplies and seismic activity.
Added
In connection with the Baker Hughes Transaction, Cactus Companies is obligated to pay Baker Hughes Holdings $10.0 million on the first anniversary of the Closing Date and $14.5 million at such time as Baker Hughes Company ceases to be a member of the Joint Venture.
Removed
For example, in January 2025, President Biden issued a Memorandum of Withdrawal that could have had the effect of preventing future leasing by the federal government (and therefore oil and gas exploration) of the lands underlying federal waters offshore the U.S.
Added
For further information on the Joint Venture please refer to (i) the complete text of the Joint Venture LLC Agreement, a copy of which is filed as Exhibit 10.29 to this Annual Report and (ii) note 19 to our consolidated financial statements. Our Products and Services We have two operating segments consisting of Pressure Control and Spoolable Technologies.
Removed
East Coast, the eastern Gulf of Mexico, the Pacific Ocean off the coasts of Washington, Oregon, and California, and additional portions of the Northern Bering Sea in Alaska. The Trump Administration, however, overturned President Biden’s Memorandum of Withdrawal and issued a series of executive orders that signal a shift in the United States’ energy and climate change policies.
Added
Field service and other revenues are primarily earned when we provide installation and other field services for both product sales and equipment rental. For the year ended December 31, 2025, we derived 76% of our total revenues from the sale of our products, 8% from rentals and 16% from field service and other.
Removed
Future administrations may, however, pursue executive orders similar to, or more restrictive than, those put in place by President Biden. The topic of oil and gas leasing on public land remains politically fraught.
Added
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Recent Developments and Trends” for a discussion of trends in market demand.
Removed
For example, the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) appropriates significant federal funding for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles and supporting infrastructure and carbon capture and sequestration, amongst other provisions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

74 edited+33 added−13 removed111 unchanged
Outbreaks of other pandemics or contagious diseases may in the future disrupt our operations, suppliers or facilities, result in increased costs for certain goods or otherwise impact us in a manner similar to the COVID-19 pandemic. The ongoing conflicts in various parts of the world may adversely affect our business and results of operations.
Outbreaks of other pandemics or contagious diseases may in the future disrupt our operations, suppliers or facilities, result in increased costs for certain goods or otherwise impact us in a manner similar to the COVID-19 pandemic. The ongoing conflicts in various parts of the world may affect our business and results of operations.
Risks Related to the Oilfield Services Industry and Our Business Demand for our products and services depends on oil and gas industry activity and customer expenditure levels, which are directly affected by trends in the demand for and price of crude oil and natural gas and availability of capital.
Risks Related to the Oilfield Services Industry and Our Business Demand for our products and services depends on oil and gas industry activity and customer expenditure levels, which are directly affected by trends in the supply of and demand for and price of crude oil and natural gas and availability of capital.
The payment obligations under the TRA are our obligations and not obligations of Cactus Companies, and we expect that the payments we will be required to make under the TRA will be substantial. Estimating the amount and timing of payments that may become due under the TRA Agreement is by its nature imprecise.
The payment obligations under the TRA are our obligations and not obligations of Cactus Companies, and we expect that the payments we will be required to make under the TRA will be substantial. Estimating the amount and timing of payments that may become due under the TRA is by its nature imprecise.
Oil and natural gas E&P may decline as a result of environmental requirements, including land use policies and other actions to restrict oil and gas leasing and permitting in response to environmental and climate change concerns.
Oil and natural gas E&P activity may decline as a result of environmental requirements, including land use policies and other actions to restrict oil and gas leasing and permitting in response to environmental and climate change concerns.
The failure of our IT systems or those of our vendors to perform as anticipated for any reason or any significant breach of security could disrupt our business and result in numerous adverse consequences, including reduced effectiveness and efficiency of operations, inappropriate disclosure of confidential and proprietary information, reputational harm, increased overhead costs and loss of important information, which could have a material adverse effect on our business and results of operations.
The failure of our IT systems or those of our vendors to perform as anticipated for any reason or any significant breach of security could disrupt our business and result in numerous adverse consequences, including reduced effectiveness and efficiency of operations, inappropriate disclosure of confidential and proprietary information, reputational harm, increased overhead costs and loss of important information, which could have a material adverse effect on our business and results of operations and cash flows.
In addition, our results of operations may be adversely affected by further rising costs to the extent we are unable to recoup them from our customers.
In addition, our results of operations may be adversely affected by further rising costs to the extent we are unable to partially recoup them from our customers.
There is no assurance that we will be able to continue to purchase and move these materials on a timely basis or at commercially viable prices, nor can we be certain of the impact of changes to tariffs and future legislation that may impact trade with China or other countries.
There is no assurance that we will be able to continue to purchase and move these materials on a timely basis or at commercially viable prices, nor can we be certain of the impact of changes to tariffs, litigation related to tariffs and future legislation that may impact trade with China or other countries.
U.S. drilling and completion activity could be adversely affected by any significant constraints in equipment, labor or takeaway capacity in the regions in which we operate. U.S. drilling and completion activity may be impacted by, among other things, the availability and cost of ancillary equipment and services, pipeline capacity, and material and labor shortages.
U.S. drilling and completion activity could be adversely affected by any significant constraints in equipment, labor or takeaway capacity in the regions in which we operate. U.S. drilling and completion activity may be impacted by, among other things, the availability and cost of ancillary equipment and services, pipeline capacity, and material and labor availability and costs.
In addition to our facilities in the United States, we operate a production facility in China and have facilities in Australia and Canada that sell and rent equipment as well as provide parts, repair services and field services associated with installation. Additionally, we provide rental and field service operations in the Middle East.
In addition to our facilities in the United States, we operate a production facilities in China and, Vietnam, and we have facilities in Australia and Canada that sell and rent equipment as well as provide parts, repair services and field services associated with installation. Additionally, we provide rental and field service operations in the Middle East.
Risks inherent in our industry include the risks of equipment defects, installation errors, the presence of multiple contractors at the wellsite over which we have no control, vehicle accidents, fires, explosions, blowouts, surface cratering, 12 Table of Contents uncontrollable flows of gas or well fluids, pipe or pipeline failures, abnormally pressured formations and various environmental hazards such as oil spills and releases of, and exposure to, hazardous substances.
Risks inherent in our industry include the risks of equipment defects, installation errors, the presence of multiple contractors at the wellsite over which we have no control, vehicle accidents, fires, explosions, blowouts, surface cratering, uncontrollable flows of gas or well fluids, pipe or pipeline failures, abnormally pressured formations and various environmental hazards such as oil spills and releases of, and exposure to, hazardous substances.
Despite our implementation of security measures, our systems are vulnerable to damage from computer viruses, natural disasters, incursions by intruders or hackers, failures in hardware or software, power fluctuations, cyber terrorists and other similar disruptions. Additionally, we rely on third parties to support the operation of our IT hardware and software infrastructure, and in certain instances, utilize web‑based applications.
Despite our implementation of security measures, our systems may be vulnerable to damage from computer viruses, natural disasters, incursions by intruders or hackers, failures in hardware or software, power fluctuations, cyber terrorists and other similar disruptions. Additionally, we rely on third parties to support the operation of our IT hardware and software infrastructure, and in certain instances, utilize web‑based applications.
The adoption of new laws or regulations at the federal, state, local or foreign level imposing reporting obligations on, or otherwise limiting, delaying or banning, the hydraulic fracturing process or other processes on which hydraulic fracturing and subsequent hydrocarbon production relies, such as water disposal, could make it more difficult to complete oil and natural gas wells.
The adoption of new laws or regulations at the federal, state, local or foreign level imposing reporting obligations on, or otherwise limiting, delaying or banning, the hydraulic fracturing process or 14 Table of Contents other processes on which hydraulic fracturing and subsequent hydrocarbon production relies, such as water disposal, could make it more difficult to complete oil and natural gas wells.
Our policies, procedures and programs may not always protect us from reckless or criminal acts committed by our employees or agents, and severe criminal or civil sanctions may be imposed as a result of violations of these laws.
Our policies, procedures and programs may not always protect us from reckless or criminal acts committed by our associates or agents, and severe criminal or civil sanctions may be imposed as a result of violations of these laws.
These laws and regulations, as well as the 13 Table of Contents adoption of other new laws and regulations affecting our operations or the exploration, production and transportation of crude oil and natural gas by our customers, could adversely affect our business and operating results by increasing our costs of compliance, increasing the costs of compliance and costs of doing business for our customers, limiting the demand for our products and services or restricting our operations.
These laws and regulations, as well as the adoption of other new laws and regulations affecting our operations or the exploration, production and transportation of crude oil and natural gas by our customers, could adversely affect our business and operating results by increasing our costs of compliance, increasing the costs of compliance and costs of doing business for our customers, limiting the demand for our products and services or restricting our operations.
These downturns cause many E&P companies to reduce their capital budgets and drilling activity. Any future downturn or expected downturn could result in a significant decline in demand for oilfield services and adversely affect our business, results of operations and cash flows.
These downturns cause exploration and production ("E&P") companies to reduce their capital budgets and drilling activity. Any future downturn or expected downturn could result in a significant decline in demand for oilfield services and adversely affect our business, results of operations and cash flows.
The payments under the TRA are not conditioned upon a holder of rights under the TRA having a continued ownership interest in us. In certain cases, payments under the TRA may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the TRA.
The payments under the TRA are not conditioned upon a holder of rights under the TRA having a continued ownership interest in us. 17 Table of Contents In certain cases, payments under the TRA may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the TRA.
In addition, new laws and 19 Table of Contents regulations governing data privacy, cybersecurity, and the unauthorized disclosure of confidential information pose increasingly complex compliance challenges and potentially elevate costs, and any failure to comply with these laws and regulations could result in significant penalties and legal liability.
In addition, new laws and regulations governing data privacy, cybersecurity, and the unauthorized disclosure of confidential information pose increasingly complex compliance challenges and potentially elevate costs, and any failure to comply with these laws and regulations could result in significant penalties and legal liability.
Our ability to source and transport low-cost raw materials and components, such as steel, tube and bar stock, forgings and machined components is critical to our ability to successfully compete.
Our ability to source and transport raw materials and components, such as steel, tube and bar stock, forgings and machined components is critical to our ability to successfully compete.
Any such attack or other breach of our information technology systems—or those of our third-party service providers, suppliers or other business partners—could have a material adverse effect on our business, operating results, financial condition, our reputation or cash flows.
Any such attack or other breach of our IT systems—or those of our third-party service providers, suppliers or other business partners—could have a material adverse effect on our business, operating results, financial condition, our reputation or cash flows.
If we elect to terminate the TRA early or it is terminated early due to Cactus Inc.’s failure to honor a material obligation thereunder or due to certain mergers or other changes of control, our obligations under the TRA would accelerate and we would be required to make an immediate payment equal to the present value of the anticipated future payments to be made by us under the TRA (determined by applying a discount rate equivalent to the 30-day SOFR plus 0.715%) and such payment is expected to be substantial.
If we elect to terminate the TRA early or it is terminated early due to Cactus Inc.’s failure to honor a material obligation thereunder or due to certain mergers or other changes of control, our obligations under the TRA would accelerate and we would be required to make an immediate payment equal to the present value of the anticipated future payments to be made by us under the TRA (determined by applying a discount rate equivalent to the 30-day SOFR plus 221.5 basis points) and such payment is expected to be substantial.
The foregoing number is merely an estimate and the actual payment could differ materially. There can be no assurance that we will be able to finance our obligations under the TRA. 17 Table of Contents Payments under the TRA are based on the tax reporting positions that we will determine.
The foregoing number is merely an estimate and the actual payment could differ materially. There can be no assurance that we will be able to finance our obligations under the TRA. Payments under the TRA are based on the tax reporting positions that we will determine.
Holders of Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or our amended and restated certificate of incorporation. Cactus WH Enterprises owned approximately 13% of our voting power as of December 31, 2024.
Holders of Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or our amended and restated certificate of incorporation. Cactus WH Enterprises owned approximately 12.1% of our voting power as of December 31, 2025.
As we continue to integrate FlexSteel into our operations, we may learn additional information about FlexSteel, such as unknown or contingent liabilities and issues relating to compliance with applicable laws, that could potentially have an adverse effect on our business, financial condition and results of operations.
As we integrate the Joint Venture into our operations, we may learn additional information about the Joint Venture, such as unknown or contingent liabilities and issues relating to compliance with applicable laws, that could potentially have an adverse effect on our business, financial condition and results of operations.
We rely on information technology systems and networks in our operations, and those of our third-party vendors, suppliers and other business partners. Despite our implementation of security measures, our systems are vulnerable to damage from computer viruses, natural disasters, incursions by intruders or hackers, failures in hardware or software, power fluctuations, cyber terrorists and other similar disruptions.
We rely on IT systems and networks in our operations, and those of our third-party vendors, suppliers and other business partners. Despite our implementation of security measures, our systems may be vulnerable to damage from computer viruses, natural disasters, incursions by intruders or hackers, failures in hardware or software, power fluctuations, cyber terrorists and other similar disruptions.
The ongoing conflicts in Ukraine and the Middle East could have adverse effects on global macroeconomic conditions which could negatively impact our business and results of operations. The conflicts are highly unpredictable and have resulted in volatility with oil and natural gas prices worldwide.
The ongoing conflicts in Venezuela, Iran, Ukraine and other countries in the Middle East could have effects on global macroeconomic conditions which could impact our business and results of operations. The conflicts are highly unpredictable and have resulted in volatility with oil and natural gas prices worldwide.
Increased costs, increased transit times, increased tariffs, or lack of availability, of raw materials and other components may result in increased operating expenses and adversely affect our results of operations and cash flows.
Increased costs, inflation, increased transit times, changes in global trade policies, increased tariffs, or lack of availability, of raw materials and other components may result in increased operating expenses and adversely affect our results of operations and cash flows.
We are incorporated in Delaware and are governed by the Delaware General Corporation Law (“DGCL”). The DGCL allows a corporation to pay dividends only out of a surplus, as determined under Delaware law or, if there is no surplus, out of net profits for the fiscal year in which the dividend was declared and for the preceding fiscal year.
The DGCL allows a corporation to pay dividends only out of a surplus, as determined under Delaware law or, if there is no surplus, out of net profits for the fiscal year in which the dividend was declared and for the preceding fiscal year.
Should our current suppliers be unable to provide the necessary raw materials or components or otherwise fail to deliver such materials and components timely and, in the quantities required, resulting delays in the provision of products or services to our customers could have a material adverse effect on our business, results of operations and cash flows.
Further, should our current suppliers be unable to provide the necessary raw materials or components or otherwise fail to deliver materials and components timely and, in the quantities required, as a result of global trade policies or other reasons, resulting delays in the provision of products or services to our customers could have a material adverse effect on our business, results of operations and cash flows.
The CC Unit Holders own all outstanding shares of our Class B common stock, representing approximately 14.4% of our total outstanding common stock.
The CC Unit Holders own all outstanding shares of our Class B common stock, representing approximately 13.7% of our total outstanding common stock.
The loss of an important customer could adversely affect our results of operations and financial condition. Our customers are engaged in the oil and natural gas E&P business primarily in the United States, but also in Australia, Canada, the Middle East and other select international markets.
We are dependent on a relatively small number of customers in a single industry. The loss of an important customer could adversely affect our results of operations and financial condition. Our customers are engaged in the oil and natural gas E&P business primarily in the United States, but also in Australia, Canada, the Middle East and other select international markets.
If the TRA were terminated as of December 31, 2024, the estimated termination payments, based on the assumptions discussed above, would have been approximately $273.7 million (calculated using a discount rate equal to the 12-month term SOFR published by CME Group Benchmark Administration Limited, plus 71.513 basis points, applied against an undiscounted liability of approximately $406.5 million).
If the TRA were terminated as of December 31, 2025, the estimated termination payments, based on the assumptions discussed above, would have been approximately $251.2 million (calculated using a discount rate equal to the 12-month term SOFR published by CME Group Benchmark Administration Limited, plus 221.5 basis points, applied against an undiscounted liability of approximately $348.4 million).
In addition, some provisions of our amended and restated certificate of incorporation and amended and restated bylaws could make it more difficult for a third party to acquire control of us, even if the change of control would be beneficial to our shareholders, including: • limitations on the removal of directors, including a classified board whereby only one-third of the directors are elected each year, which will be phased out between 2025 and 2027; • limitations on the ability of our shareholders to call special meetings; • providing that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws; and • establishing advance notice and certain information requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by shareholders at shareholder meetings.
In addition, some provisions of our amended and restated certificate of incorporation and amended and restated bylaws could make it more difficult for a third party to acquire control of us, even if the change of control would be beneficial to our shareholders, including: • limitations on the removal of directors, including a classified board whereby only one-third of the directors are elected each year, which will be phased out by 2027; • limitations on the ability of our shareholders to call special meetings; • providing that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws; and • establishing advance notice and certain information requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by shareholders at shareholder meetings. 16 Table of Contents In addition, certain change of control events have the effect of accelerating the payment due under the TRA, which could be substantial and accordingly serve as a disincentive to a potential acquirer of our company.
Permitting, authorization or renewal delays, the inability to obtain new permits or the revocation of current permits could impact our customers’ operations and cause a loss of revenue and potentially have a material adverse effect on our business, results of operations and cash flows.
Permitting, authorization or renewal delays, the inability to obtain new permits or the revocation of current permits could impact our customers’ operations and cause a loss of revenue and potentially have a material adverse effect on our business, results of operations and cash flows. Competition within the oilfield services industry may adversely affect our ability to market our services.
We depend on key personnel. The loss of key personnel could adversely impact our business. The loss of qualified employees or an inability to retain and motivate additional highly‑skilled employees required for the operation and expansion of our business could hinder our ability to successfully maintain and expand our market share.
The loss of qualified associates or an inability to retain and motivate additional highly‑skilled associates required for the operation and expansion of our business could hinder our ability to successfully maintain and expand our market share.
In addition, we would no longer have the benefit of certain increases in tax basis covered under the TRA, and we would not be able to recover any payments previously made by us under the TRA, even if the corresponding tax benefits (including any claimed increase in the tax basis of Cactus Companies’ assets) were subsequently determined to have been unavailable.
In addition, we would no longer have the benefit of certain increases in tax basis covered under the TRA, and we would not be able to recover any payments previously made by us under the TRA, even if the corresponding tax benefits (including any claimed increase in the tax basis of Cactus Companies’ assets) were subsequently determined to have been unavailable. 18 Table of Contents General Risks A failure of our information technology infrastructure and cyberattacks could adversely impact us.
Although we believe our equipment and processes currently give us a competitive advantage, as competitors and others use or develop new or comparable technologies in the future, we may lose market share or be placed at a competitive disadvantage. Further, we may face competitive pressure to develop, implement, license or acquire certain new technologies at a substantial cost.
Although we believe our equipment and processes currently give us a competitive advantage in the U.S., as competitors and others use or develop new or comparable technologies in the future, we may lose market share or be placed at a competitive disadvantage.
Demand for our products and services depends primarily upon the general level of activity in the oil and gas industry, including the number of drilling rigs in operation, the number of oil and gas wells being drilled, the depth, lateral length and drilling conditions of these wells, the volume of production, the number of well completions and the level of well remediation activity, the number of wells put into production and the corresponding capital spending by oil and gas exploration and production companies.
Demand for our products and services depends primarily upon the general level of activity in the oil and gas industry, including the number of drilling rigs in operation, the number of oil and gas wells being drilled, the depth, lateral length and drilling conditions of these wells, the volume of production, the number of well completions and the level of well remediation activity, the number of wells put into production, the number of wells drilled but uncompleted, the impact of actions taken by the Organization of Petroleum Exporting Countries and other oil and gas producing countries ("OPEC+") affecting the global supply of oil and gas and the capital spending by oil and gas exploration and production companies.
Risks Related to Our Class A Common Stock We are a holding company whose only material asset is our equity interest in Cactus Companies, and accordingly, we are dependent upon distributions from Cactus Companies to pay taxes, make payments under the TRA and cover our corporate and other overhead expenses and pay dividends to holders of our Class A Common Stock.
Additional conflicts in other parts of the world could have similar negative impacts on our business. 15 Table of Contents Risks Related to Our Class A Common Stock We are a holding company whose only material asset is our equity interest in Cactus Companies, and accordingly, we are dependent upon distributions from Cactus Companies to pay taxes, make payments under the Tax Receivable Agreement ("TRA") and cover our corporate and other overhead expenses and pay dividends to holders of our Class A Common Stock.
However, future presidential administrations may pursue executive orders that increase the amount of regulation. The global outbreak of COVID-19 had, and similar pandemics in the future may have, an adverse impact on our business and operations. The COVID-19 pandemic negatively affected our revenues and operations.
The global outbreak of COVID-19 had, and similar pandemics in the future may have, an adverse impact on our business and operations. The COVID-19 pandemic negatively affected our revenues and operations.
Accordingly, we rely upon the capacity, reliability and security of our IT hardware and software infrastructure and our ability to expand and update this infrastructure in response to our changing needs.
We depend on our information technology (“IT”) systems for the efficient operation of our business. Accordingly, we rely upon the capacity, reliability and security of our IT hardware and software infrastructure and our ability to expand and update this infrastructure in response to our changing needs.
Risks Related to the FlexSteel Business We may not realize the anticipated benefits from the FlexSteel acquisition, and failure to realize the anticipated benefits could adversely impact our business and our operating results.
Risks Related to the Joint Venture and the Baker Hughes Transaction We may not realize the anticipated benefits from the Baker Hughes Transaction, and the Baker Hughes Transaction could adversely impact our business and our operating results.
In January 2025, however, President Trump signed executive orders that, among other things, direct federal executive departments and agencies to initiate a regulatory freeze for certain rules that have not taken effect, pending review by the newly appointed agency head, call upon the EPA to submit a report on the continuing applicability of its endangerment finding for GHGs under the Clean Air Act and issue guidance on the “social cost of carbon” to consider whether such metric should be eliminated, and pause the disbursement of funds appropriated through the IRA and the Infrastructure Investments and Jobs Act.
Early in 2025, President Trump signed executive orders that, among other things, directed federal executive departments and agencies to initiate a regulatory freeze for certain rules, called upon the Environmental Protection Agency (the “EPA”) to submit a report on the continuing applicability of its endangerment finding for GHGs under the Clean Air Act and issue guidance on the “social cost of carbon” to consider whether such metric should be eliminated, and paused the disbursement of funds appropriated through the Inflation Reduction Act of 2022 and the Infrastructure Investments and Jobs Act.
Increased regulation or a move away from the use of fossil fuels caused by additional regulation could also reduce demand for our products and services.
Increased regulation or a move away from the use of fossil fuels caused by additional regulation could also reduce demand for our products and services, leading to a material adverse effect on our business, results of operations and cash flows.
Additionally, we may issue additional shares of Class A common stock or convertible securities in subsequent public offerings. We had 68,151,542 outstanding shares of Class A common stock and 11,432,545 outstanding shares of Class B common stock as of February 25, 2025.
Additionally, we may issue additional shares of Class A common stock or convertible securities in subsequent public offerings. We had 68,899,841 outstanding shares of Class A common stock and 10,958,435 outstanding shares of Class B common stock as of February 25, 2026.
Some of our competitors have greater financial, technical and personnel resources that may allow them to enjoy various competitive advantages in the development and implementation of new technologies. We cannot be certain that we will be able to continue to develop and implement new technologies or products.
Further, we may face competitive pressure to develop, implement, license or acquire certain new technologies at a substantial cost. Some of our competitors have greater financial, technical and personnel resources that may allow them to enjoy various competitive advantages in the development and implementation of new technologies.
Competition within the oilfield services industry may adversely affect our ability to market our services. The oilfield services industry is highly competitive and fragmented and includes numerous companies capable of competing effectively in our markets, including several large companies that possess substantially greater financial and other resources than we do.
The oilfield services industry is highly competitive and fragmented and includes numerous companies capable of competing effectively in our markets, including several large companies that possess substantially greater financial and other resources than we do. Consolidation of our competitors and the entry of new competitors could result in a further increase in competition.
In addition, the conflicts could lead to increased cyberattacks or could aggravate other risk factors that we identify in our public filings. Additional conflicts in other parts of the world could have similar negative impacts on our business.
In addition, the conflicts could lead to increased cyberattacks or could aggravate other risk factors that we identify in our public filings.
In addition, we import raw materials, semi‑finished goods, and finished products into, among other countries, the United States, China, Australia, Canada, Vietnam, India and the Middle East for use in such countries or for manufacturing and/or finishing for re‑export and import into another country for use or further integration into equipment or systems.
We are also subject to the risks that our associates and agents outside of the United States may fail to comply with applicable laws. 13 Table of Contents In addition, we import raw materials, semi‑finished goods, and finished products into, among other countries, the United States, China, Australia, Canada, Vietnam, India and the Middle East for use in such countries or for manufacturing and/or finishing for re‑export and import into another country for use or further integration into equipment or systems.
We could incur substantial liabilities and damages that are either not covered by customer indemnities or insurance or that are in excess of policy limits, or incur liability at a time when we are not able to obtain liability insurance. Such potential liabilities could have a material adverse effect on our business, results of operations and cash flows.
We could incur substantial liabilities and damages that are either not covered by customer indemnities 12 Table of Contents or insurance or that are in excess of policy limits, or incur liability at a time when we are not able to obtain liability insurance.
Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations.
We may also have not correctly assessed the significance of certain liabilities of the Acquired Business identified in the course of our due diligence. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations.
The integration process could take longer than anticipated and could result in the distraction of management, the loss of key employees from either company, the disruption of each company’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies, any of which could adversely affect our ability to maintain relationships with customers, employees or other third parties, or our ability to achieve the anticipated benefits of the FlexSteel acquisition, and could harm our financial performance. 18 Table of Contents FlexSteel may have liabilities that are not known to us and the indemnities negotiated in the Merger Agreement may not offer adequate protection.
The integration process could take longer than anticipated and could result in the loss of key employees from the Company and/or the Joint Venture, the disruption of the Company’s and/or the Joint Venture’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures or policies, any of which could adversely affect our ability to maintain relationships with customers, employees or other third parties, or our ability to achieve the anticipated benefits of the Baker Hughes Transaction, and could harm our financial performance.
We typically enter into agreements with our customers governing the provision of our services, which usually include certain indemnification provisions for losses resulting from operations.
Oilfield anti-indemnity provisions enacted by many states may restrict or prohibit a party’s indemnification of us. We typically enter into agreements with our customers governing the provision of our services, which usually include certain indemnification provisions for losses resulting from operations.
Holders of our Class A common stock may not receive dividends on their Class A common stock. Holders of our Class A common stock are entitled to receive only such dividends as our board of directors may declare out of funds legally available for such payments.
Holders of our Class A common stock are entitled to receive only such dividends as our Board of Directors may declare out of funds legally available for such payments. We are incorporated in Delaware and are governed by the Delaware General Corporation Law (“DGCL”).
Instability and unforeseen changes in any of the markets in which we conduct business could have an adverse effect on the demand for, or supply of, our business, results of operations and cash flows. We are dependent on a relatively small number of customers in a single industry.
Instability and unforeseen changes in any of the markets in which we conduct business could have an adverse effect on the demand for, or supply of, our business, results of operations and cash flows. We have also expanded our operations and footprint in the Middle East as a result of the Baker Hughes Transaction.
We cannot predict the size of future issuances of our Class A common stock or securities convertible into Class A common stock or the effect, if any, that future issuances and sales of shares of our Class A common stock will have on the market price of our Class A common stock. 16 Table of Contents Sales of substantial amounts of our Class A common stock (including shares issued in connection with an acquisition) or secondary offerings, or the perception that such sales could occur, may adversely affect prevailing market prices of our Class A common stock.
Sales of substantial amounts of our Class A common stock (including shares issued in connection with an acquisition) or secondary offerings, or the perception that such sales could occur, may adversely affect prevailing market prices of our Class A common stock.
In addition, adverse market conditions reduce demand for well servicing equipment, which results in excess equipment and lower utilization rates. If market conditions deteriorate or if adverse market conditions persist, the prices we are able to charge and utilization rates may decline.
If market conditions deteriorate or if adverse market conditions persist, the prices we are able to charge and utilization rates may decline.
Consolidation of our competitors and the entry of new competitors could result in a further increase in competition. The amount of equipment available may exceed demand, which could result in active price competition. Many contracts are awarded on a bid basis, which may further increase competition based primarily on price.
The amount of equipment available may exceed demand, which could result in active price competition. Many contracts are awarded on a bid basis, which may further increase competition based primarily on price. In addition, adverse market conditions reduce demand for well servicing equipment, which results in excess equipment and lower utilization rates.
Historically, we have been dependent on a relatively small number of customers for our revenues. Our business, results of operations and financial position could be materially adversely affected if an important customer ceases to engage us for our services on favorable terms, or at all, or fails to pay or delays paying us significant amounts of our outstanding receivables.
Our business, results of operations and financial position could be materially adversely affected if an important customer ceases to engage us for our services on favorable terms, or at all, or fails to pay or delays paying us significant amounts of our outstanding receivables for product and services provided. Additionally, the E&P industry has seen consolidation activity, which may continue.
Such permits or approvals are typically required by state agencies but can also be required by federal and local governmental agencies or other third parties.
Our customers are required to obtain permits or authorizations from one or more governmental agencies or other third parties to perform drilling and completion activities, including hydraulic fracturing. Such permits or approvals are typically required by state agencies but can also be required by federal and local governmental agencies or other third parties.
As part of the Merger, we assumed certain liabilities of FlexSteel. There may be liabilities that we failed to identify or we were unable to discover in the course of performing due diligence investigations into FlexSteel. We may also have not correctly assessed the significance of certain FlexSteel liabilities identified in the course of our due diligence.
As part of the Baker Hughes Transaction, the Joint Venture assumed certain liabilities of the Acquired Business. There may be liabilities that we failed or were unable to discover in the course of performing due diligence investigations into the Acquired Business.
In particular, our customers may elect not to purchase our products or services if they view our environmental or safety record as unacceptable, which could cause us to lose customers and substantial revenues. Oilfield anti-indemnity provisions enacted by many states may restrict or prohibit a party’s indemnification of us.
In particular, our customers may elect not to purchase our products or services if they view our environmental or safety record as unacceptable, which could cause us to lose customers and substantial revenues, leading to a material adverse effect on our business, results of operations and cash flows.
Cactus WH Enterprises LLC has the ability to direct the voting of a significant percentage of the voting power of our common stock, and its interests may conflict with those of our other shareholders.
To the extent that we are unable to make payments under the TRA for any reason, such payments will be deferred and will accrue interest until paid. Cactus WH Enterprises has the ability to direct the voting of a significant percentage of the voting power of our common stock, and its interests may conflict with those of our other shareholders.
Additionally, the E&P industry has seen consolidation activity, which may continue. Changes in ownership of our customers may result in the loss of, or reduction in, business from those customers which could materially and adversely affect our business, results of operations and cash flows.
Changes in ownership of our customers may result in the loss of, or reduction in, business from those customers which could materially and adversely affect our business, results of operations and cash flows. Delays in obtaining, or inability to obtain or renew, permits or authorizations by our customers for their operations could impair our business.
Further, it could increase our customers’ costs of compliance and doing business, and otherwise adversely affect the hydraulic fracturing services they perform, which could negatively impact demand for our products. Increasing attention by the public and government agencies to climate change and environmental, social and governance (“ESG”) matters could also negatively impact demand for our products and services.
Further, it could increase our customers’ costs of compliance and doing business, and otherwise adversely affect the hydraulic fracturing services they perform, which could negatively impact demand for our products, leading to a material adverse effect on our business, results of operations and cash flows.
As noted above, we are also subject to the possibility of cyber-attacks, which themselves may result in a violation of these laws. Finally, if we acquire a company that has violated or is not in compliance with applicable data protection laws, we may incur significant liabilities and penalties as a result.
As noted above, we are also subject to the possibility of cyber-attacks, which themselves may result in a violation of these laws.
If we fail to achieve some or all of the benefits expected to result from the acquisition, or if such benefits are delayed, our business could be impacted. FlexSteel’s operations are subject to many of the same risks as the Pressure Control operations.
If we fail to achieve some or all of the benefits expected to result from the Baker Hughes Transaction, or if such benefits are delayed, our business could be harmed. We may experience difficulties in integrating the operations of the Joint Venture into our business.
We will not be able to enforce claims with respect to the representations and warranties that the sellers of FlexSteel provided under the Merger Agreement. In connection with the Merger, the sellers of FlexSteel gave customary representations and warranties related to FlexSteel under the Merger Agreement.
We may not be able to enforce claims with respect to certain of the representations and warranties that Baker Hughes Holdings made in the Framework Agreement.
We may not be able to achieve the full potential strategic and financial benefits that were expected to be achieved at the time of the acquisition of the FlexSteel business, or such benefits may be delayed or not occur at all.
We may not be able to achieve the full potential strategic and financial benefits that we expect to achieve from the Baker Hughes Transaction, or such benefits may be delayed or not occur at all. We may not achieve the anticipated benefits from the Baker Hughes Transaction for a variety of reasons, including, among others, unanticipated costs, charges and expenses.
Increasing attention is being given to corporate activities related to ESG in public discourse and the investment community.
Increasing attention by the public and government agencies to climate change and environmental, social and governance (“ESG”) matters could also negatively impact demand for our products and services. Increasing attention is being given to corporate activities related to ESG in public discourse and the investment community.
Transit times through and availability of the Panama Canal may be impacted by weather patterns and political tensions among the US, Panama and China. In the United States, the Trump administration has indicated that it may increase existing tariffs or implement new tariffs that may result in increased costs and inflation impacting the cost of other raw materials.
Transit times through and availability of the Panama Canal may be impacted by weather patterns and political tensions among the US, Panama and China.
Additional compliance obligations could also increase costs of compliance and costs of doing business for our customers, thereby reducing demand for our products and services.
Additional compliance obligations could also increase costs of compliance and costs of doing business for our customers, thereby reducing demand for our products and services. Finally, increased frequency and severity of storms, droughts, floods, wildfires and other climatic events could have an adverse impact on our operations. Many of our customers utilize hydraulic fracturing in their operations.
To provide for coverage against certain breaches by the sellers of their representations and warranties and certain pre-closing taxes of FlexSteel, we obtained a representation and warranty insurance policy. The policy is subject to a retention amount, exclusions, policy limits and certain other customary terms and conditions.
Accordingly, the liability of these entities with respect to breaches of Baker Hughes Holdings’ representations and warranties under the Framework Agreement is limited. To provide for coverage against certain breaches by Baker Hughes Holdings of its representations and warranties in the Framework Agreement and certain pre-closing taxes of the Joint Venture, we have obtained a representation and warranty insurance policy.
State or federal initiatives to incentivize a shift away from fossil fuels could also reduce demand for hydrocarbons. For example, the Inflation Reduction Act appropriates significant federal 14 Table of Contents funding for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles and supporting infrastructure and carbon capture and sequestration, amongst other provisions.
State or federal initiatives to incentivize a shift away from fossil fuels could also reduce demand for hydrocarbons.
We will not be able to enforce any claims against the sellers, including any claims relating to breaches of such representations and warranties. The sellers’ liability with respect to breaches of their representations and warranties under the Merger Agreement is limited.
We may not be able to enforce any claims against Baker Hughes Holdings or its affiliates relating to breaches of certain representations and warranties in the Framework Agreement, except in the case of fraud as provided in the Framework Agreement.
Removed
Delays in obtaining, or inability to obtain or renew, permits or authorizations by our customers for their operations could impair our business. Our customers are required to obtain permits or authorizations from one or more governmental agencies or other third parties to perform drilling and completion activities, including hydraulic fracturing.
Added
We depend on key executives and management personnel. Our future plans depend in part on our ability to identify, retain, develop and/or recruit suitable successors to senior management. The loss of any key executives and/or managers could adversely impact our business.
Removed
In January 2025, however, President Trump signed an executive order directing federal executive departments and agencies to initiate a regulatory freeze for certain rules that have not taken effect, pending review by the newly appointed agency head, identify and exercise emergency authorities to facilitate conventional energy production, transportation, and refining, and mandate a review of existing regulations that may burden domestic energy development.
Added
Historically, we have been dependent on a relatively small number of customers for our revenues.
Removed
We are also subject to the risks that our employees and agents outside of the United States may fail to comply with applicable laws.
Added
We cannot be certain that we will be able to continue to develop and implement new technologies or products.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Item 1C. Cybersecurity Risk Management and Strategy. We depend on information systems and related technologies for internal purposes, including secure data storage, processing, and transmission, as well as in our interactions with our business associates, such as customers and suppliers.
Item 1C. Cybersecurity Risk Management and Strategy. We depend on information systems and related technologies for internal purposes, including secure data storage, processing, and transmission, as well as in our interactions with our business associates, customers, and suppliers.
Risks from Cybersecurity Incidents While we have experienced and will likely continue to experience varying degrees of cyber incidents in the normal conduct of our business, including attacks resulting from phishing emails and ransomware infections, those incidents have not materially affected the Company’s business strategy, results of operations, or financial condition.
Risks from Cybersecurity Incidents While we have experienced and will likely continue to experience varying degrees of cyber incidents in the normal conduct of our business, including attacks resulting from phishing emails and malware infections, those incidents have not materially affected the Company’s business strategy, results of operations, or financial condition.
There can be no assurance that the systems we have designed to prevent or limit the effects of cyber incidents or attacks will be sufficient to prevent or detect future material consequences arising from incidents or attacks, or to avoid a material adverse impact on our systems after such incidents or attacks do occur.
There can be no assurance that the systems we have designed to prevent or limit the effects of cyber incidents or attacks will be sufficient to prevent or detect future material consequences arising from incidents or attacks, or to avoid a material adverse impact on our systems after 22 Table of Contents such incidents or attacks do occur.
Risk Management Personnel Our Director of Cybersecurity and Networking has direct responsibility for assessing, monitoring and managing risks related to cybersecurity threats in conjunction with the Vice President of Information Technology. Third party experts and/or consultants are retained to help identify, assess and monitor cybersecurity incidents and related risks.
Risk Management Personnel Our Information Technology ("IT") Director of Cybersecurity and Networking has direct responsibility for assessing, monitoring and managing risks related to cybersecurity threats in conjunction with the Senior Vice President of IT and Chief Information Officer. Third party experts and/or consultants are retained to help identify, assess and monitor cybersecurity incidents and related risks.
The reviews may include evaluations of risks and incidents identified by third-party providers retained to review our cyber risk as well as cybersecurity threat scenario planning.
The reviews may include evaluations of risks and incidents identified by third-party providers retained to review our cyber risk as well as cybersecurity threat scenario planning. Identified risks related to cybersecurity threats may also be analyzed as part of our ERM process.
Our Director of Cybersecurity and Networking has been in that position with the Company since 2019 and, including prior experience, has over 13 years’ experience in managing IT infrastructure, architecture and security. Our Vice President of Information Technology has been with the Company in his current position and similar roles since its inception in 2011.
Our IT Director of Cybersecurity and Networking has been in that position with the Company since 2019 and, including prior experience, has significant experience in managing IT infrastructure, architecture and security. Our Senior Vice President of IT and Chief Information Officer joined the Company in 2025.
Identified risks related to cybersecurity threats may also be analyzed as part of our ERM process. 21 Table of Contents Board of Director Oversight Our Audit Committee is responsible for oversight of our programs and procedures related to cybersecurity risk. Management provides periodic reports to the Audit Committee on cybersecurity risk.
Board of Director Oversight Our Audit Committee is responsible for oversight of our programs and procedures related to cybersecurity risk. Management provides periodic reports to the Audit Committee on cybersecurity risk. The Audit Committee reports significant findings from these reports to the full Board of Directors. 23 Table of Contents
Prior to joining the Company, he had over 20 years’ experience in oversight of Information Technology systems including ERP systems, infrastructure, and networking. Monitoring Cybersecurity Risks and Incidents Our Director of IT Cybersecurity and Networking meets regularly with members of our executive team to discuss and review risks related to cybersecurity.
Over his extensive career, he has developed substantial expertise in enterprise resource planning, infrastructure, applications, IT architecture and cyber security, including experience in areas closely aligned with the Company’s operations. Monitoring Cybersecurity Risks and Incidents Our IT Director of Cybersecurity and Networking meets regularly with members of our executive team to discuss and review risks related to cybersecurity.
Removed
The Audit Committee reports significant findings from these reports to the full Board of Directors.

Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties The following table sets forth information with respect to our current principal facilities. We believe that our facilities are suitable and adequate for our current operations.
Item 2. Properties The following table sets forth information with respect to our current principal facilities as of December 31, 2025. We believe that our facilities are suitable and adequate for our current operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 3. Legal Proceedings Due to the nature of our business, we are, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities, including workers’ compensation claims and employment related disputes.
Item 3. Legal Proceedings Due to the nature of our business, we are, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities, including workers’ compensation claims and employment related disputes. For information concerning existing legal proceedings as of December 31, 2025, see Note 13 to our consolidated financial statements.
Removed
In the opinion of our management, there is no pending litigation, dispute or claim against us that, if decided adversely, will have a material adverse effect on our results of operations, financial condition or cash flows. Item 4. Mine Safety Disclosures Not applicable. 22 Table of Contents PART II
Added
Item 4. Mine Safety Disclosures Not applicable. 24 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Holders of Class B common stock own a corresponding number of CC Units which may be redeemed for shares of Class A common stock. The principal market for our Class A common stock is the New York Stock Exchange (“NYSE”), where it is traded under the symbol “WHD.” No public trading market currently exists for our Class B common stock.
Holders of Class B common stock own a corresponding number of CC Units which may be redeemed for shares of Class A common stock. The principal market for our Class A common stock is the New York Stock Exchange, where it is traded under the symbol “WHD.” No public trading market currently exists for our Class B common stock.
We currently intend to continue paying the quarterly dividend at the current levels while retaining the balance of future earnings, if any, to finance the growth of our business or repurchase shares of our Class A common stock. We would seek to increase the dividend in the future if our financial condition and results of operations permit.
We currently intend to continue paying the quarterly dividend at the current levels while retaining the balance of future earnings, if any, to finance the growth of our business or repurchase shares of our Class A common stock. We may seek to increase the dividend in the future if our financial condition and results of operations permit.
As of December 31, 2024, there was one holder of record of our Class A common stock. The foregoing does not include the number of shareholders whose shares are nominally held by banks, brokerage houses or other institutions, but includes all such institutions as one record holder.
As of December 31, 2025, there was one holder of record of our Class A common stock. The foregoing does not include the number of shareholders whose shares are nominally held by banks, brokerage houses or other institutions, but includes all such institutions as one record holder.
The following graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that Cactus Inc. specifically incorporates it by reference into such filing. 23 Table of Contents Issuer Purchases of Equity Securities The following sets forth information with respect to our repurchase of Class A common stock during the three months ended December 31, 2024 (in whole shares).
The following graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that Cactus Inc. specifically incorporates it by reference into such filing. 26 Table of Contents Issuer Purchases of Equity Securities The following sets forth information with respect to our repurchase of Class A common stock during the three months ended December 31, 2025 (in whole shares).
As of December 31, 2024, there were five holders of record of our Class B common stock. Dividends We have paid a regular quarterly cash dividend on our Class A common stock as approved by our board of directors since December 2019.
As of December 31, 2025, there were five holders of record of our Class B common stock. Dividends We have paid a regular quarterly cash dividend on our Class A common stock as approved by our Board of Directors since December 2019.
We have paid quarterly dividends uninterrupted since initiation of the cash dividend program and the approved dividend per share amount has increased from the initial amount of $0.09 per share to the current amount of $0.13 per share of Class A common stock.
We have paid quarterly dividends uninterrupted since initiation of the cash dividend program and the approved dividend per share amount has increased from the initial amount of $0.09 per share to the current amount of $0.14 per share of Class A common stock.
Federal excise tax on certain repurchases of stock by publicly traded U.S. corporations after December 31, 2022. Accordingly, this new excise tax applies to our share repurchase program. For the years ended December 31, 2024 and 2023, issuances of shares exceeded share repurchases and, as such, there was no excise tax.
Federal excise tax on certain repurchases of stock by publicly traded U.S. corporations after December 31, 2022. Accordingly, this excise tax applies to our share repurchase program. For the years ended December 31, 2025 and 2024, issuances of shares exceeded share repurchases and, as such, there was no excise tax.
The total shareholder return assumes $100 was invested on December 31, 2019 in Cactus Inc., the S&P 500 Index, the S&P Oil and Gas Equipment Select Industry Index and the PHLX Oil Service Index. It also assumes reinvestment of all dividends.
The total shareholder return assumes $100 was invested on December 31, 2020 in Cactus Inc., the S&P 500 Index, the S&P Oil & Gas Equipment & Services Select Industry Index and the PHLX Oil Service Index. It also assumes reinvestment of all dividends.
Period Total number of shares purchased (1) Weighted-average price paid per share (2) Total number of shares purchased as part of publicly announced plans or programs (3) Maximum dollar value of shares that may yet be purchased under the plans or programs (3) October 1-31, 2024 172 $ 60.07 — $ 146,302,153 November 1-30, 2024 — $ — — $ 146,302,153 December 1-31, 2024 — $ — — $ 146,302,153 Total 172 $ 60.07 — $ — (1) Consists of shares of Class A common stock repurchased from employees to satisfy tax withholding obligations related to restricted stock units that vested during the period.
Period Total number of shares purchased (1) Weighted-average price paid per share (2) Total number of shares purchased as part of publicly announced plans or programs (3) Maximum dollar value of shares that may yet be purchased under the plans or programs (3) October 1-31, 2025 — $ — — $ 146,302,153 November 1-30, 2025 — $ — — $ 146,302,153 December 1-31, 2025 289 $ 43.36 — $ 146,302,153 Total 289 $ 43.36 — $ — (1) Consists of shares of Class A common stock repurchased from employees to satisfy tax withholding obligations related to restricted stock units that vested during the period.
In fiscal year 2024, the annual dividend rate for our Class A common stock was $0.50 per share compared to $0.46 per share in fiscal year 2023 and $0.44 per share in fiscal year 2022.
In fiscal year 2025, the annual dividend rate for our Class A common stock was $0.54 per share compared to $0.50 per share in fiscal year 2024 and $0.46 per share in fiscal year 2023.
In future years, the Company could be subject to the excise tax depending on the total shares repurchased in comparison to shares issued. Performance Graph The graph below compares the cumulative total shareholder return on our common stock to the S&P 500 Index, the S&P Oil & Gas Equipment & Services Index and the PHLX Oil Service Index.
In future years, the Company could be subject to the excise tax depending on the total shares repurchased in comparison to shares issued. 25 Table of Contents Performance Graph The graph below compares the cumulative total shareholder return on our Class A common stock to the S&P 500 Index, the S&P Oil & Gas Equipment & Services Select Industry Index and the PHLX Oil Service Index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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We expect that our existing cash on hand, cash generated from operations and available borrowings under our Amended ABL Credit Facility will be sufficient for the next 12 months to meet our material cash requirements, including working capital requirements, debt service obligations, anticipated capital expenditures, lease obligations, repurchases of shares of our Class A common stock, expected TRA liability payments, anticipated tax liabilities and dividends to holders of our Class A common stock as well as pro rata cash distributions to holders of CC Units other than Cactus Inc.
We expect that our existing cash on hand, cash generated from operations and available borrowings under our Amended ABL Credit Facility and Term Loan Facility will be sufficient for the next 12 months to meet our material cash requirements, including working capital requirements, debt service obligations, anticipated capital expenditures, lease obligations, repurchases of shares of our Class A common stock, expected TRA liability payments, anticipated tax liabilities and dividends to holders of our Class A common stock as well as pro rata cash distributions to holders of CC Units other than Cactus Inc.
The tax benefit is dependent upon future events and assumptions, the amount of the redeeming unit holders’ tax basis in its CC Units (formerly CW Units) at the time of the relevant redemption, the depreciation and amortization 33 Table of Contents periods that apply to the increase in tax basis, the amount and timing of taxable income we generate in the future and the U.S. federal, state and local income tax rate then applicable, and the portion of Cactus Inc.’s payments under the TRA that constitute imputed interest or give rise to depreciable or amortizable tax basis.
The tax benefit is dependent upon future events and assumptions, the amount of the redeeming unit holders’ tax basis in its CC Units (formerly CW Units) at the time of the relevant redemption, the depreciation and amortization 37 Table of Contents periods that apply to the increase in tax basis, the amount and timing of taxable income we generate in the future and the U.S. federal, state and local income tax rate then applicable, and the portion of Cactus Inc.’s payments under the TRA that constitute imputed interest or give rise to depreciable or amortizable tax basis.
Estimates can change materially from period to period based on many factors. Accordingly, if conditions change in the future, we may record impairment losses, which could be material to any particular reporting period. 32 Table of Contents Goodwill Goodwill represents the excess of purchase price paid over the fair value of the net assets of acquired businesses.
Estimates can change materially from period to period based on many factors. Accordingly, if conditions change in the future, we may record impairment losses, which could be material to any particular reporting period. 36 Table of Contents Goodwill Goodwill represents the excess of purchase price paid over the fair value of the net assets of acquired businesses.
The repurchase program does not obligate the Company to purchase any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. At December 31, 2024, $146.3 million of Class A common stock could be repurchased under our share repurchase program.
The repurchase program does not obligate the Company to purchase any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. At December 31, 2025, $146.3 million of Class A common stock could be repurchased under our share repurchase program.
Corporate and other expenses for 2024 were $26.0 million, a decrease of $8.8 million from $34.7 million for 2023. The decrease was largely 27 Table of Contents attributable to lower professional fees related to transaction costs associated with growth initiatives, including the closing of and accounting for the FlexSteel acquisition in 2023. Interest income (expense), net.
Corporate and other expenses for 2024 were $26.0 million, a decrease of $8.8 million from $34.7 million for 2023. The decrease was largely attributable to lower professional fees related to transaction costs associated with growth initiatives, including the closing of and accounting for the FlexSteel acquisition in 2023. Interest income (expense), net.
Pressure Control manufacturing and production facilities are located in Bossier City, Louisiana and Suzhou, China. Demand for our product sales in the Pressure Control segment are driven primarily by the number of new wells drilled, as each new well requires a wellhead and, after the completion phase, a production tree.
Pressure Control manufacturing and production facilities are located in Bossier City, Louisiana, Suzhou, China and Hai Duong, Vietnam. Demand for our product sales in the Pressure Control segment are driven primarily by the number of new wells drilled, as each new well requires a wellhead and, after the completion phase, a production tree.
Demand for our rental items is driven primarily by the number of well completions as we rent frac trees to oil and gas operators to assist in hydraulic fracturing. Rental demand is also driven to a lesser extent by drilling activity as we rent tools used in the installation of wellheads.
Demand for our rental items is driven primarily by the number of well completions as we rent frac trees to oil and gas operators to assist in hydraulic fracturing. Rental demand is also driven by drilling activity as we rent tools used in the installation of wellheads.
Oil and gas exploration and production activity is in turn heavily influenced by, among other factors, investor sentiment, availability of capital and oil and gas prices locally and worldwide, which have historically been volatile. Revenues generated by our Pressure Control and Spoolable Technologies operating segments are derived from three sources: products, rentals, and field service and other.
Oil and gas E&P activity is in turn heavily influenced by, among other factors, investor sentiment, availability of capital and oil and gas prices locally and worldwide, which have historically been volatile. Revenues generated by our Pressure Control and Spoolable Technologies operating segments are derived from three sources: products, rentals, and field service and other.
The decrease was primarily attributable to lower gross margins during the period due to decreased customer activity levels and higher selling, general and administrative ("SG&A") expenses. The increase in SG&A expenses primarily related to higher personnel costs, stock-based compensation expense and other reserves, partially offset by a decrease in bad debt expense. Spoolable Technologies.
The decrease was primarily attributable to lower gross 32 Table of Contents margins during the period due to decreased customer activity levels and higher selling, general and administrative ("SG&A") expenses. The increase in SG&A expenses primarily related to higher personnel costs, stock-based compensation expense and other reserves, partially offset by a decrease in bad debt expense. Spoolable Technologies.
We received approximately $169.9 million of proceeds, net of issuance costs, from issuing shares of our Class A common stock during 2023. The year ended December 31, 2023 also included payments of approximately $6.9 million of debt issuance costs.
We received approximately $169.9 million of proceeds, 35 Table of Contents net of issuance costs, from issuing shares of our Class A common stock during 2023. The year ended December 31, 2023 also included payments of approximately $6.9 million of debt issuance costs.
For information concerning our future lease payments as of December 31, 2024, see Note 10 to our consolidated financial statements.
For information concerning our future lease payments as of December 31, 2025, see Note 10 to our consolidated financial statements.
The performance of our operating segments is primarily evaluated based on segment operating income (in addition to other measures), which is defined as income before taxes and before interest income (expense), net, other income (expense), net and corporate and other expenses not allocated to the operating segments. 26 Table of Contents Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table presents summary consolidated operating results for the periods indicated: Year Ended December 31, 2024 2023 $ Change % Change (in thousands) Revenues Pressure Control $ 724,038 $ 756,727 $ (32,689) (4.3)% Spoolable Technologies 407,038 340,233 66,805 19.6 Corporate and other (1,262) — (1,262) — Total revenues 1,129,814 1,096,960 32,854 3.0 Operating income Pressure Control 210,710 236,934 (26,224) (11.1) Spoolable Technologies 104,864 62,172 42,692 68.7 Total segment operating income 315,574 299,106 16,468 5.5 Corporate and other expenses (25,961) (34,740) 8,779 (25.3) Total operating income 289,613 264,366 25,247 9.6 Interest income (expense), net 6,459 (6,480) 12,939 nm Other income, net 3,204 4,490 (1,286) (28.6) Income before income taxes 299,276 262,376 36,900 14.1 Income tax expense 66,518 47,536 18,982 39.9 Net income $ 232,758 $ 214,840 $ 17,918 8.3 Less: net income attributable to non-controlling interest 47,351 45,669 1,682 3.7 Net income attributable to Cactus Inc. $ 185,407 $ 169,171 $ 16,236 9.6% nm = not meaningful Pressure Control.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table presents summary consolidated operating results for the periods indicated: Year Ended December 31, 2024 2023 $ Change % Change (in thousands) Revenues Pressure Control $ 724,038 $ 756,727 $ (32,689) (4.3)% Spoolable Technologies 407,038 340,233 66,805 19.6 Corporate and other (1,262) — (1,262) — Total revenues 1,129,814 1,096,960 32,854 3.0 Operating income Pressure Control 210,710 236,934 (26,224) (11.1) Spoolable Technologies 104,864 62,172 42,692 68.7 Total segment operating income 315,574 299,106 16,468 5.5 Corporate and other expenses (25,961) (34,740) 8,779 (25.3) Total operating income 289,613 264,366 25,247 9.6 Interest income (expense), net 6,459 (6,480) 12,939 nm Other income, net 3,204 4,490 (1,286) (28.6) Income before income taxes 299,276 262,376 36,900 14.1 Income tax expense 66,518 47,536 18,982 39.9 Net income $ 232,758 $ 214,840 $ 17,918 8.3 Less: net income attributable to non-controlling interest 47,351 45,669 1,682 3.7 Net income attributable to Cactus Inc. $ 185,407 $ 169,171 $ 16,236 9.6% nm = not meaningful Pressure Control.
Rental and field service and other revenues are closely correlated with revenues from product sales, as items sold usually have an associated rental and service component. 25 Table of Contents Seasonality Our business experiences some seasonality during the fourth quarter due to holidays and customers managing their budgets as the year closes out.
Rental and field service and other revenues are closely correlated with revenues from product sales, as items sold usually have an associated rental and service component. 28 Table of Contents Seasonality Our business experiences some seasonality during the fourth quarter due to holidays and customers managing their cash balances as the year closes out.
Under our share repurchase program, shares may be repurchased from time to 29 Table of Contents time in open market transactions or block trades, in privately negotiated transactions or any other method permitted under U.S. securities laws, rules and regulations.
Under our share repurchase program, shares may be repurchased from time to time in open market transactions or block trades, in privately negotiated transactions or any other method permitted under U.S. securities laws, rules and regulations.
A 100 basis point decrease/increase in the blended tax rate used would decrease/increase the TRA liability recorded at December 31, 2024 by approximately $15.3 million. Recent Accounting Pronouncements See Note 2 of the notes to the Consolidated Financial Statements for discussion of recent accounting pronouncements.
A 100 basis point decrease/increase in the blended tax rate used would decrease/increase the TRA liability recorded at December 31, 2025 by approximately $14.4 million. Recent Accounting Pronouncements See Note 2 of the notes to the Consolidated Financial Statements for discussion of recent accounting pronouncements.
Assuming no material changes in the relevant tax law, we expect that if the TRA were terminated as of December 31, 2024, the estimated termination payments, based on the assumptions discussed in Note 11 of the notes to the Consolidated Financial Statements, would be approximately $273.7 million, calculated using a discount rate equal to the 12-month term SOFR published by CME Group Benchmark Administration Limited, plus 71.513 basis points, applied against an undiscounted liability of $406.5 million.
Assuming no material changes in the relevant tax law, we expect that if the TRA were terminated as of December 31, 2025, the estimated termination payments, based on the assumptions discussed in Note 11 of the notes to the Consolidated Financial Statements, would be approximately $251.2 million, calculated using a discount rate equal to the 12-month term SOFR published by CME Group Benchmark Administration Limited, plus 221.5 basis points, applied against an undiscounted liability of $348.4 million.
Additionally, we recognized $4.9 million of expense associated with the revaluation of our deferred tax asset as a result of a change in our forecasted state tax rate, $0.5 million of expense related to the finalization of our 2022 tax returns, a $1.2 million benefit associated with permanent differences related to equity compensation and a $1.2 million benefit associated with other adjustments.
Additionally, in 2024 we recognized $2.1 million of expense associated with the revaluation of our deferred tax asset as a result of a change in our forecasted state tax rate, a $2.1 million benefit related to the finalization of our 2023 tax returns, a $0.7 million benefit associated with permanent differences related to equity compensation and $0.7 million of expense associated with other adjustments.
Year Ended December 31, 2024 2023 2022 WTI Oil Price ($/bbl) (1) $ 76.63 $ 77.58 $ 94.90 Natural Gas Price ($/MMBtu) (2) $ 2.19 $ 2.53 $ 6.45 U.S. Land Drilling Rigs (3) 580 667 705 (1) U.S. Energy Information Administration (“EIA”) Cushing, OK WTI (“West Texas Intermediate”) spot price per barrel of crude oil.
Year Ended December 31, 2025 2024 2023 WTI Oil Price ($/bbl) (1) $ 65.39 $ 76.63 $ 77.58 Natural Gas Price ($/MMBtu) (2) $ 3.52 $ 2.19 $ 2.53 U.S. Land Drilling Rigs (3) 545 580 667 (1) U.S. Energy Information Administration (“EIA”) Cushing, OK WTI (“West Texas Intermediate”) spot price per barrel of crude oil.
This can lead to lower activity in our three revenue categories as well as lower margins, particularly in field services due to lower labor utilization.
These activities can lead to lower demand in our three revenue categories as well as lower margins, particularly in field services due to lower labor utilization.
Interest expense in 2023 was primarily related to borrowings outstanding through July 2023 under the Amended ABL Credit Facility (as defined in Note 6 in the notes to the Consolidated Financial Statements) which were required to finance the FlexSteel acquisition. Other income, net.
Interest expense in 2023 was primarily related to borrowings outstanding through July 2023 under the Amended ABL Credit Facility (the "Second Amended ABL Credit Facility") which were required to finance the FlexSteel acquisition. Other income, net.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2023 2022 (in thousands) Net cash provided by operating activities $ 340,280 $ 117,884 Net cash used in investing activities (654,793) (25,536) Net cash provided by (used in) financing activities 103,275 (47,382) Net cash provided by operating activities was $340.3 million in 2023 compared to $117.9 million in 2022.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 316,113 $ 340,280 Net cash used in investing activities (35,388) (654,793) Net cash provided by (used in) financing activities (70,144) 103,275 Net cash provided by operating activities was $316.1 million in 2024 compared to $340.3 million in 2023.
As of December 31, 2024, we had no borrowings outstanding under our Amended ABL Credit Facility and $222.6 million of available borrowing capacity. We had $2.4 million in letters of credit outstanding at December 31, 2024 which reduced our available borrowing capacity. We were in compliance with the covenants of the Amended ABL Credit Facility as of December 31, 2024.
We had $1.8 million in letters of credit outstanding at December 31, 2025 which reduced our available borrowing capacity. We were in compliance with the covenants of the Amended ABL Credit Facility as of December 31, 2025.
We currently estimate our net capital expenditures for the year ending December 31, 2025 will range from $45 million to $55 million, mostly related to rental fleet investments including drilling tools, international expansion, diversification of our low cost supply chain, enhancements for our Baytown, TX manufacturing plant and additional deployment of equipment to facilitate installation of recent product introductions.
We currently estimate our net capital expenditures for the year ending December 31, 2026 will range from $40 million to $50 million, including investments in international expansion such as investments in the Joint Venture, further diversification of our low cost supply chain, enhancements for our Baytown, TX manufacturing plant and Hobbs, NM service center and additional deployment of equipment to facilitate installation of recent product introductions.
Partial valuation releases occur in conjunction with redemptions of CW Units (or CC Units, in the case of redemptions after the CC Reorganization) as a portion of Cactus Inc.’s deferred tax assets from its investment in Cactus LLC (or, after the CC Reorganization, its investment in Cactus Companies) becomes realizable.
Partial valuation releases occur in conjunction with redemptions of CC Units as a portion of Cactus Inc.’s deferred tax assets from its investment in Cactus Companies becomes realizable. Cactus Inc. is only subject to federal and state income tax on its share of income from Cactus Companies. Income allocated to the non-controlling interest is only taxable to the non-controlling interest.
Our primary sources of liquidity and capital resources are cash on hand, cash flows generated by operating activities and, if necessary, borrowings under our Amended ABL Credit Facility. Depending upon market conditions and other factors, we may also have the ability to issue additional equity and debt if needed.
Our primary sources of liquidity and capital resources are cash on hand, cash flows generated by operating activities and, if necessary, borrowings under our Amended ABL Credit Facility (as defined in Note 6 in the notes to the Consolidated Financial Statements).
Pressure Control revenue was $756.7 million for 2023, an increase of $68.4 million, or 10%, from $688.4 million for 2022. The increase in revenues was primarily due to higher sales of wellhead and production related equipment resulting from higher drilling and completion activity by our customers.
Pressure Control revenue was $717.2 million for 2025, a decrease of $6.8 million, or 0.9%, from $724.0 million for 2024. The decrease in revenues was primarily due to reduced sales of wellhead and production related equipment resulting from lower drilling and completion activity by our customers following a decline in rig counts, offset by an increase in intersegment sales.
(2) EIA Henry Hub Natural Gas spot price per million British Thermal Unit (“MMBtu”). (3) Baker Hughes. Onshore drilling and completion activity levels declined through the first half of 2024, resulting in the average number of U.S. land drilling rigs for 2024 to be 13% below 2023 levels.
Onshore U.S. drilling activity levels declined through the first half of 2025, resulting in the average number of U.S. land drilling rigs for 2025 to be 6% below 2024 levels. Average oil prices were down 15% from 2024 average levels.
A 10% increase in the price of our Class A common stock at December 31, 2024 would have increased the discounted liability by $9.6 million to $283.3 million (an undiscounted increase of $15.8 million to $422.3 million), and likewise, a 10% decrease in the price of our Class A common stock at December 31, 2024 would have decreased the discounted liability by $9.6 million to $264.1 million (an undiscounted decrease of $15.8 million to $390.8 million). 30 Table of Contents Cash Flows Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 316,113 $ 340,280 Net cash used in investing activities (35,388) (654,793) Net cash provided by (used in) financing activities (70,144) 103,275 Net cash provided by operating activities was $316.1 million in 2024 compared to $340.3 million in 2023.
Cash Flows Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2025 2024 (in thousands) Net cash provided by operating activities $ 258,417 $ 316,113 Net cash used in investing activities (39,063) (35,388) Net cash used in financing activities (69,064) (70,144) Net cash provided by operating activities was $258.4 million in 2025 compared to $316.1 million in 2024.
The increase in interest expense, net of $10.2 million was primarily related to borrowings under the Amended ABL Credit Facility related to financing the FlexSteel acquisition. Other income (expense), net. Other income (expense), net represents non-cash adjustments for the revaluation of the liability related to the tax receivable agreement as a result of changes to the forecasted state tax rate.
The decrease primarily related to the revaluation of the liability related to the tax receivable agreement as a result of changes to the forecasted state tax rate. Income tax expense. Income tax expense for 2025 was $59.0 million (22.6% effective tax rate) compared to $66.5 million (22.2% effective tax rate) for 2024.
Operating cash flows increased primarily due to higher income and a decrease in cash outflows associated with working capital, largely related to decreased purchases of inventory as well as higher collections on receivable balances.
Operating cash flows decreased primarily due to lower earnings as well as an increase in cash outflows associated with working capital, largely related to purchases of inventory of $26.8 million, reflecting escalated values due to tariffs. These decreases in operating cash flows were partially offset by an increase in customer collections of $13.4 million.
Increased payments of $6.6 million in deferred financing costs, increased distributions to members of $7.0 million, higher dividend payments of $3.4 million, $1.6 million of additional payments on finance leases and a $0.7 million increase in share repurchases partially offset the aforementioned cash inflows associated with the equity financing activities during 2023.
The year ended December 31, 2025 value includes a $3.4 million decrease in share repurchases, primarily associated with the Company's share repurchase program, more than offset by higher dividend payments of approximately $3.8 million, a $2.4 million payment of deferred financing costs and a $2.3 million increase in member distributions.
Removed
Average oil prices were relatively stable in 2024 and were down 1% from 2023 average levels. Natural gas prices declined approximately 13% in 2024 from 2023 with prices averaging $2.19 per MMBtu in 2024 compared to $2.53 per MMBtu in 2023.
Added
(2) EIA Henry Hub Natural Gas spot price per million British Thermal Unit (“MMBtu”). (3) Based on Baker Hughes rig count information. Broad economic uncertainty, geopolitical uncertainty, and robust supply of crude oil relative to demand resulted in lower oil prices and U.S. drilling activity levels in 2025.
Removed
Natural gas prices were lower as inventory levels remained above five-year maximum levels through most of the first half of 2024. Spot prices averaged $3.01 per MMBtu in December 2024 and closed 2024 at $3.40 per MMBtu, as colder than forecasted weather impacted prices.
Added
Conversely, optimism regarding the medium-to-long term outlook for natural gas demand strengthened as energy demands from artificial intelligence-associated infrastructure build out increased. Henry Hub natural gas prices increased approximately 61% in 2025 from 2024 with prices averaging $3.52 per MMBtu in 2025 compared to $2.19 per MMBtu in 2024.
Removed
The increased year-end 2024 natural gas prices could favorably impact oil and gas industry activity levels, although most of our customers are primarily oil-focused, thus moderating the potential impact to demand for our products and services.
Added
Natural gas-directed drilling activity favorably impacted industry activity levels, but not enough to offset weakness in oil-directed drilling activity. Ongoing conflicts in Ukraine and the Middle East have had global repercussions on commodity prices and have resulted in increased market uncertainty and volatile equity and commodity pricing. U.S.
Removed
The ongoing conflict in Ukraine and prolonged conflict in the Middle East have had repercussions globally by continuing to cause uncertainty, not only in the oil and natural gas markets, but also in the financial markets and global supply chain.
Added
Trade Policies Over the course of 2025, the Trump administration has implemented and announced a number of new tariffs, including new Section 232 tariffs of 50% on imports of steel and certain products made from steel from most countries outside of the U.S., and Synthetic Opioid tariffs on all imports from China.
Removed
Additionally, the U.S. presidential election outcome has introduced further uncertainty to global supply chains, as the new administration has signaled the potential to impose and increase tariffs, including on China, where we have a manufacturing facility.
Added
Threats and actual implementation of tariffs continue to cause much market and geopolitical uncertainty, as evidenced by the recently announced and then rescinded imposition of tariffs by the U.S. on imports from NATO allies opposed to U.S. intervention in Greenland.
Removed
Such uncertainty could continue to result in stock price volatility and supply chain disruptions as well as higher oil and natural gas prices which could cause higher inflation worldwide, impact consumer spending and negatively impact demand for our goods and services.
Added
Tariff announcements have resulted in global equity, bond, and currency markets to experience heightened levels of volatility as market participants incorporate potential effects of supply chain disruption, inflation, and consumer demand into pricing models.
Removed
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table presents summary consolidated operating results for the periods indicated: Year Ended December 31, 2023 2022 $ Change % Change (in thousands) Revenues Pressure Control $ 756,727 $ 688,369 $ 68,358 9.9% Spoolable Technologies 340,233 — 340,233 — Total revenues 1,096,960 688,369 408,591 59.4 Operating income Pressure Control 236,934 202,650 34,284 16.9 Spoolable Technologies 62,172 — 62,172 — Total segment operating income 299,106 202,650 96,456 47.6 Corporate and other expenses (34,740) (27,902) (6,838) 24.5 Total operating income 264,366 174,748 89,618 51.3 Interest income (expense), net (6,480) 3,714 (10,194) nm Other income (expense), net 4,490 (1,910) 6,400 nm Income before income taxes 262,376 176,552 85,824 48.6 Income tax expense 47,536 31,430 16,106 51.2 Net income $ 214,840 $ 145,122 $ 69,718 48.0 Less: net income attributable to non-controlling interest 45,669 34,948 10,721 30.7 Net income attributable to Cactus Inc. $ 169,171 $ 110,174 $ 58,997 53.5% 28 Table of Contents nm = not meaningful Pressure Control.
Added
We are incurring, and expect to continue to incur, elevated tariff expenses on our goods imported from Vietnam and China, and experience generally higher steel input costs at our Bossier City manufacturing facility as a result of the broad Section 232 tariffs.
Removed
In addition, increased rental of drilling and completion equipment and field service associated with product and rental revenues also increased as a result of higher customer activity. Operating income of $236.9 million in 2023 increased $34.3 million, or 17%, from $202.7 million in 2022.
Added
Both tariffs and higher steel input costs have impacted profitability, although the impact has been partially mitigated by cost reduction efforts and increased pricing.
Removed
The increase was primarily attributable to higher gross margins during the period and increased volume partially offset by higher segment selling, general and administrative (“SG&A”) expenses. The increase in SG&A expenses primarily related to higher bad debt expense, travel and entertainment expenses, professional fees and hardware and software expenses. Spoolable Technologies.
Added
The weaker oil demand and increased supply outlook and associated decline in commodity pricing has led and is likely to continue to lead to lower U.S. land drilling and completion activity levels in 2026 and correspondingly may reduce domestic demand for our products and services. 29 Table of Contents Pillar Two Framework The Organization for Economic Cooperation and Development (“OECD”) has introduced a framework (“Pillar Two”) that provides for a new, global minimum tax of at least 15% on the income of large multinational corporations arising in each jurisdiction in which they operate.
Removed
Spoolable Technologies revenue of $340.2 million and operating income of $62.2 million represents FlexSteel results generated from February 28, 2023, the date of acquisition, through December 31, 2023.
Added
Pillar Two is being implemented on a country-by-country basis, and many countries have adopted rules in this regard.
Removed
The results for Spoolable Technologies include the following items resulting from purchase accounting: approximately $14.9 million of expense related to the change in fair value of the estimated earn-out payment for the FlexSteel acquisition, $23.5 million of inventory step-up expense, $20.3 million of intangible amortization expense and depreciation expense of $13.8 million primarily associated with the step-up of fixed assets.
Added
The United States has raised concerns regarding Pillar Two and has set out a proposed “side-by-side” solution under which U.S. parented groups (such as the Company) would be exempted from certain minimum taxes under Pillar Two in recognition of the existing U.S. minimum tax rules to which they are subject.
Removed
Corporate and other expenses. Corporate and other expenses for 2023 were $34.7 million, an increase of $6.8 million from $27.9 million for 2022. The increase was largely attributable to higher professional fees of $3.8 million related to transaction costs associated with the closing of and accounting for the FlexSteel acquisition.
Added
On June 28, 2025, the Group of Seven issued a statement indicating that they agree that a side-by-side solution could preserve gains made by jurisdictions in tackling base erosion and profit shifting and provide clarity and stability in the international tax landscape.
Removed
Additional increases were attributable to higher personnel costs of which the largest increase was related to stock-based compensation. Interest income (expense), net. Interest expense, net was $6.5 million in 2023 compared to interest income, net of $3.7 million in 2022.
Added
However, none of the OECD member states that have adopted Pillar Two have enacted rules necessary to implement the side-by-side solution.
Removed
Income tax expense. Income tax expense for 2023 was $47.5 million (18.1% effective tax rate) compared to $31.4 million (17.8% effective tax rate) for 2022.
Added
The Company continues to evaluate the impact of both Pillar Two and the proposed side-by-side solution and estimates the impacts to income tax expense to be immaterial. 2025 Tax Legislation On July 4, 2025, tax legislation colloquially known as the One Big Beautiful Bill Act (“OBBBA”) was enacted.
Removed
Income tax expense for 2023 includes approximately $56.6 million of expense associated with current income offset by a $12.1 million benefit associated with the release of our valuation allowance previously provided for our investment in Cactus Companies based on the determination that the deferred tax asset was realizable due to our ability to generate sufficient taxable income of the appropriate type.
Added
The OBBBA includes tax provisions such as the reinstatement of immediate deductibility of certain capital expenditures for tangible, depreciable personal property of domestic research and development expenditures. These provisions have the effect of accelerating tax deductions which, in turn, will reduce current tax expense with an offset to deferred tax expense.
Removed
Income tax expense for 2022 primarily included approximately $36.4 million of expense associated with current income offset by a $1.7 million benefit associated with permanent differences related to equity compensation, a $1.7 million benefit resulting from a change in our forecasted state rate and a $1.4 million tax benefit associated with the partial valuation allowance release in conjunction with CW Unit redemptions during 2022.
Added
The Company continues to evaluate the impacts of this legislation but anticipates the impact to total income tax expense will be immaterial.
Removed
Cactus Inc. is only subject to federal and state income tax on its share of income from Cactus Companies. Income allocated to the non-controlling interest is only taxable to the non-controlling interest. Liquidity and Capital Resources At December 31, 2024, we had $342.8 million of cash and cash equivalents.
Added
The performance of our operating segments is primarily evaluated based on segment operating income (in addition to other measures), which is defined as income before taxes and before interest income (expense), net, other income (expense), net and corporate and other expenses not allocated to the operating segments. 30 Table of Contents Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 The following table presents summary consolidated operating results for the periods indicated: Year Ended December 31, 2025 2024 $ Change % Change (in thousands) Revenues Pressure Control $ 717,191 $ 724,038 $ (6,847) (0.9)% Spoolable Technologies 368,245 407,038 (38,793) (9.5) Corporate and other (6,385) (1,262) (5,123) nm Total revenues 1,079,051 1,129,814 (50,763) (4.5) Operating income Pressure Control 189,861 210,710 (20,849) (9.9) Spoolable Technologies 98,660 104,864 (6,204) (5.9) Total segment operating income 288,521 315,574 (27,053) (8.6) Corporate and other expenses (38,020) (25,961) (12,059) 46.5 Total operating income 250,501 289,613 (39,112) (13.5) Interest income, net 10,962 6,459 4,503 69.7 Other (expense) income, net (794) 3,204 (3,998) nm Income before income taxes 260,669 299,276 (38,607) (12.9) Income tax expense 59,027 66,518 (7,491) (11.3) Net income $ 201,642 $ 232,758 $ (31,116) (13.4) Less: net income attributable to non-controlling interest 35,628 47,351 (11,723) (24.8) Net income attributable to Cactus Inc. $ 166,014 $ 185,407 $ (19,393) (10.5)% nm = not meaningful Pressure Control.
Removed
These increases in operating cash flows were slightly offset by $20.5 million of additional income tax payments, higher TRA payments of $15.2 million and $4.6 million of additional interest paid in 2023 compared to 2022. Net cash used in investing activities was $654.8 million and $25.5 million for 2023 and 2022, respectively.
Added
Operating income of $189.9 million in 2025 resulted in a decrease of $20.8 million, or 9.9%, from $210.7 million in 2024. The decrease in operating income was primarily attributable to escalated tariff cost impacts on product margins, as well as increased legal expenses and reserves in connection with litigation claims. Spoolable Technologies.
Removed
The increase was primarily due to cash paid to acquire FlexSteel for $621.5 million, less $5.3 million in cash acquired. Additionally, our capital expenditures increased approximately $15.7 million primarily due to the $7.0 million purchase of a previously leased facility, Pressure Control rental fleet additions and enhancements and $3.0 million of capital expenditures for the Spoolable Technologies segment.
Added
Spoolable Technologies revenue of $368.2 million for 2025, represented a decrease of $38.8 million, or 9.5%, from $407.0 million for 2024, primarily due to reduced sales of spoolable pipe and associated end fittings resulting from lower domestic activity by our customers.
Removed
Other movements in our investing activities were related to the increase in proceeds from sales of assets of approximately $2.6 million from 2022. 31 Table of Contents Net cash provided by financing activities was $103.3 million for 2023 compared to net cash used in financing activities of $47.4 million for 2022.
Added
Total operating income of $98.7 million for 2025, resulted in a decrease of $6.2 million, or 5.9%, from $104.9 million for 2024. Operating income for 2025 was reduced primarily due to lower sales volume.
Removed
The increase in net cash provided by financing activities was primarily related to certain financing activities in 2023 associated with the FlexSteel acquisition. We received approximately $169.9 million of proceeds, net of issuance costs, from issuing shares of our Class A common stock during 2023.
Added
Operating income for 2024 included a non-recurring $16.3 million of expense related to the change in fair value of the earn‑out liability associated with the FlexSteel acquisition. Corporate and other. Corporate and other revenue includes the elimination of inter-segment sales from our Pressure Control segment to our Spoolable Technologies segment.
Removed
Additionally, we received $155.0 million from total borrowings under our Amended ABL Credit Facility of which all $155.0 million has been repaid.
Added
Corporate and other expenses include costs associated with executive management and other administrative functions not directly attributable to our reporting segments. Corporate and other expenses for 2025 were $38.0 million, an increase of $12.1 million from $26.0 million for 2024.
Removed
Inflation While inflationary cost increases can affect our income from operations’ margin, we believe that inflation generally has not had a material adverse effect on our results of operations.
Added
The increase was largely attributable to professional fees associated with the Baker Hughes transaction. 31 Table of Contents Interest income, net. Interest income, net was $11.0 million in 2025 compared to $6.5 million in 2024.
Removed
Other than the potential for increased inflation as a result of new tariffs and retaliatory actions by other countries, inflationary cost increases are not expected to have a material adverse effect on our results of operations.
Added
The increase in interest income, net of $4.5 million was primarily due to an increase in interest income earned on higher levels of cash invested during the period. Other (expense) income, net. Other expense, net of $0.8 million in 2025, represented a decrease of $4.0 million, compared to other income, net of $3.2 million.
Removed
In 2022, the United States experienced the highest inflation in decades primarily due to supply-chain issues, a shortage of labor and a build-up of demand for goods and services. The most noticeable adverse impact to our business was increased costs associated with freight, materials, vehicle-related costs and personnel expenses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+1 added−1 removed3 unchanged
Foreign Currency Exchange Rate Risk We have subsidiaries with operations in China, Australia and Canada who conduct business in their local currencies (functional currencies) and are therefore subject to foreign currency exchange rate risk on cash flows related to sales, expenses, financing and investing transactions in currencies other than the U.S. dollar.
Foreign Currency Exchange Rate Risk We have subsidiaries with operations in China, Australia, Canada and Vietnam who conduct business in their local currencies (functional currencies) and are therefore subject to foreign currency exchange rate risk on cash flows related to sales, expenses, financing and investing transactions in currencies other than the U.S. dollar.
In order to provide a hedge against currency fluctuations on the U.S. dollar denominated assets and liabilities held by certain of our foreign subsidiaries, we enter into monthly foreign currency forward contracts (balance sheet hedges) to offset a portion of the remeasurement gain or loss recorded.
In order to provide a hedge against currency fluctuations on the U.S. dollar denominated assets and liabilities held by certain of our foreign subsidiaries, we enter into monthly foreign currency forward contracts (balance sheet hedges) to attempt to offset the remeasurement gain or loss recorded at the foreign subsidiary.
Borrowings under our Amended ABL Credit Facility bear interest at Cactus Company’s option at either the Alternate Base Rate (as defined therein) or the Adjusted Term SOFR Rate (as defined therein), plus, in each case, an applicable margin. 34 Table of Contents
At December 31, 2025, there were no borrowings outstanding. Borrowings under our Amended ABL Credit Facility and Term Loan Facility bear interest at Cactus Company’s option at either the Alternate Base Rate (as defined therein) or the Adjusted Term SOFR Rate (as defined therein), plus, in each case, an applicable margin. 38 Table of Contents
As of December 31, 2024, if the U.S. dollar strengthened or weakened 5%, the impact to the unrealized value of our forward contracts would be approximately $0.9 million. The gain or loss on the forward contracts would be largely offset by the gain or loss on the underlying transactions, and therefore, would have minimal impact on future earnings.
As of December 31, 2025, if the U.S. dollar strengthened or weakened 5%, the impact to the unrealized value of our forward contracts would be less than $0.1 million.
Removed
Interest Rate Risk Our Amended ABL Credit Facility is variable rate debt. At December 31, 2024, there were no borrowings outstanding.
Added
The gain or loss on the forward contracts would be largely offset by the gain or loss on the underlying foreign subsidiary assets and liabilities, and therefore, would have minimal impact on future earnings. Interest Rate Risk Our Amended ABL Credit Facility (as defined in Note 6 in the notes to the Consolidated Financial Statements) is variable rate debt.

Other WHD 10-K year-over-year comparisons