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Sep 30, 2023
ChampionX Q3 2023 Earnings Report
ChampionX's financial performance reflected a mix of growth and challenges, marked by revenue decrease but increased profitability and strong cash flow.
Key Takeaways
ChampionX reported Q3 2023 results with revenue of $939.8 million, a decrease of 8% year-over-year, but a slight increase sequentially. Net income attributable to ChampionX was $77.7 million, a significant increase of 237% year-over-year. The company generated strong free cash flow of $114.6 million and adjusted EBITDA of $189.5 million, with an adjusted EBITDA margin of 20.2%.
Revenue was $939.8 million, down 8% year-over-year but up 1% sequentially.
Net income attributable to ChampionX increased 237% year-over-year to $77.7 million.
Adjusted EBITDA increased 14% year-over-year to $189.5 million.
Free cash flow was strong at $114.6 million, representing 60% of adjusted EBITDA.
ChampionX
ChampionX
ChampionX Revenue by Segment
Revenue by Segment
Production Chemical Tech Revenue
CapyFin.comProduction & Automation Tech Revenue
CapyFin.comDrilling Technologies Revenue
CapyFin.comReservoir Chemical Tech Revenue
CapyFin.com Forward Guidance
ChampionX anticipates continued positive momentum in international and offshore businesses, offset by seasonal declines in North America. Q4 revenue is expected to be between $930 million and $970 million, with adjusted EBITDA between $187 million and $197 million. The company expects to convert at least 50% of adjusted EBITDA to free cash flow and return at least 60% of free cash flow to shareholders for the year.
Positive Outlook
- Continued positive momentum in international and offshore businesses.
- Strong cash generation expected to continue.
- Expect to convert at least 50% of adjusted EBITDA to free cash flow for the full year.
- Committed to returning at least 60% of free cash flow to shareholders for the year.
- Excited about constructive market fundamentals as the oil and gas industry is benefiting from a multi-year growth cycle.
Challenges Ahead
- Seasonal declines expected in North American businesses into the year-end holidays.
- Drilling Technologies business expected to experience a sequential revenue decline similar to Q4 2022.
- Some customers may act to manage their working capital into year end.
- Revenue to be between $930 million and $970 million.
- Adjusted EBITDA of $187 million to $197 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income