Oceaneering Delivers Strong Q1 2025 Results with Robust Earnings Growth and Segment Momentum
Oceaneering International, Inc. (NYSE: OII), a global leader in engineered services and products for the offshore energy, defense, aerospace, and entertainment industries, today announced its financial results for the first quarter of 2025, reporting a strong start to the year with significant growth in earnings, operating income, and adjusted EBITDA. The performance was bolstered by healthy demand across key offshore markets and resilient activity levels in its robotics and vessel operations.
First Quarter 2025 Financial Overview
In the first three months of 2025, Oceaneering generated revenue of $675 million, marking a 13% increase compared to the first quarter of 2024. This revenue growth translated into a doubling of operating income to $73.5 million year over year. Net income surged to $50.4 million—an impressive 233% jump—driven by operational efficiencies and strong performance in several of its core business segments.
Adjusted EBITDA for the quarter reached $96.7 million, reflecting a 57% increase from the same period last year. This figure does not account for a $10.4 million inventory reserve related to the company’s theme park ride business, which impacted the Manufactured Products segment. Despite a seasonal cash flow drawdown, Oceaneering ended the quarter with a robust cash position of $382 million, underscoring its strong liquidity. Free cash flow was negative $107 million, consistent with first-quarter working capital needs.
The company also executed share repurchases totaling 479,154 shares, spending approximately $10 million during the quarter as part of its ongoing capital allocation strategy.
CEO Commentary
Rod Larson, President and Chief Executive Officer of Oceaneering, credited the outperformance to operational excellence and market resilience.
“Oceaneering exceeded expectations this quarter due to strong utilization of our remotely operated vehicles (ROVs) and sustained vessel activity, particularly in the Gulf of Mexico and West Africa,” Larson stated. “We delivered adjusted EBITDA of $96.7 million, surpassing both our internal guidance and market consensus. Operating income doubled on the back of a 13% revenue increase, highlighting the strength of our Subsea Robotics (SSR) and Offshore Projects Group (OPG) segments. I also want to highlight a major milestone in our Aerospace and Defense Technologies (ADTech) segment, which secured the largest initial contract award in our history. This contract is foundational to our forecasted growth in ADTech throughout 2025.”
He extended his appreciation to the company’s global workforce: “I want to thank our dedicated team of Oceaneers around the world. Your hard work and commitment are what made these results possible.”
Updated Full-Year 2025 Guidance
Reaffirming the company’s full-year financial outlook, Larson added: “We are maintaining our previously revised EBITDA guidance range of $380 million to $430 million for 2025. Although we adjusted the lower bound of our forecast last quarter to account for macroeconomic and market-related uncertainties, our Q1 results reinforce our confidence in this range.”
The company also reaffirmed its prior full-year segment-level guidance, initially outlined during its Q4 2024 earnings call. Additionally, Oceaneering expects the book-to-bill ratio in its Manufactured Products segment to range between 0.9 and 1.0 for the full year, reflecting cautious optimism about order activity.
Segment Performance Highlights – Q1 2025
Oceaneering’s performance varied across its five reporting segments, with strong contributions from SSR and OPG, steady performance in IMDS and ADTech, and margin pressure in Manufactured Products due to a one-time inventory adjustment.
Subsea Robotics (SSR):
SSR delivered another quarter of solid growth, with operating income climbing 35% year over year to $59.6 million on a 10% revenue increase. Notably, SSR’s EBITDA margin expanded to 35%, a 413 basis point improvement. ROV fleet utilization reached 67%, and average revenue per day utilized improved to $10,788, driven by increased offshore activity and pricing gains.
Manufactured Products:
While revenue rose modestly by 4%, operating income declined 34% to $8.7 million due to a $10.4 million inventory reserve adjustment linked to the company’s theme park ride product line. As a result, the segment’s operating margin fell to 6%. The backlog at the end of the quarter stood at $543 million, down 9% year over year. The 12-month trailing book-to-bill ratio was 0.90.
Offshore Projects Group (OPG):
OPG reported a strong recovery from prior-year lows. Operating income rose sharply to $35.7 million as revenue climbed to $165 million, supported by high vessel utilization in the Gulf of Mexico, ongoing international projects initiated in late 2024, and the absence of drydock costs that had impacted Q1 2024. Segment margins reached 22%, reflecting operational leverage and project execution efficiency.
Integrity Management and Digital Solutions (IMDS):
This segment reported flat performance relative to the prior year. Operating income totaled $3.5 million with an operating margin of 5% on revenue of $71.4 million. The company remains focused on long-term growth opportunities in data analytics and asset integrity services.
Aerospace and Defense Technologies (ADTech):
ADTech revenue held steady at $97.2 million. However, operating income fell $2.1 million to $10.7 million, and margin declined to 11%, as the company incurred readiness costs to support a large-scale government contract. This contract, the largest initial award in Oceaneering’s history, is expected to significantly bolster performance in the coming quarters.
Corporate and Unallocated Expenses:
Unallocated corporate expenses totaled $44.6 million, aligning with internal expectations.
Second Quarter 2025 Outlook
Looking ahead to the second quarter, Oceaneering anticipates a sequential increase in both revenue and adjusted EBITDA. The company forecasts Q2 2025 EBITDA in the range of $95 million to $105 million, reflecting momentum in multiple segments.
Segment-level expectations for Q2 2025 include:
- SSR: Revenue and profitability are projected to rise, supported by continued strong offshore demand.
- Manufactured Products: Revenue is expected to remain flat, but operating margins are likely to improve following Q1 adjustments.
- OPG: Revenue should remain steady, while profitability is forecast to increase significantly due to favorable project dynamics and cost normalization.
- IMDS: Revenue is expected to hold flat, with modest improvements in profitability.
- ADTech: Both revenue and operating income are expected to increase, as the segment ramps up execution on the new contract award.
- Unallocated Expenses: Anticipated to remain stable around $45 million.
Use of Non-GAAP Measures
Oceaneering emphasizes that its adjusted financial metrics, including adjusted net income, adjusted EBITDA, and free cash flow, are non-GAAP measures intended to provide a clearer picture of ongoing performance by excluding certain non-recurring or non-cash items. Full reconciliations to the nearest GAAP measures are provided in the tables accompanying this release under the section titled “Reconciliations of Non-GAAP to GAAP Financial Information.”
Conclusion
Oceaneering’s first quarter results signal a strong start to 2025, driven by operational excellence, resilient demand in offshore markets, and key contract wins in defense and aerospace. As the company maintains its full-year guidance and enters Q2 with positive momentum, leadership remains confident in its ability to navigate near-term challenges and deliver sustained shareholder value.