Cactus, Inc. (WHD): Business Model Canvas [Dec-2025 Updated]

You're looking to understand the engine driving Cactus, Inc. (WHD) right now, especially after their big move integrating the Baker Hughes Surface Pressure Control business. Honestly, this company is balancing high-margin product sales-which still make up about $\mathbf{75\%}$ of their $\text{TTM revenue}$ of roughly $\mathbf{\$1.09 \text{ Billion}}$-with a capital-light rental model and mission-critical field services. With $\mathbf{\$446 \text{ million}}$ in cash as of Q3 2025 and a $\mathbf{35\%}$ joint venture stake in that key segment, their strategy is clearly focused on engineering reliability and managing a complex global supply chain, including navigating steel tariffs. Dive into the full Business Model Canvas below to see exactly how their $\text{Value Propositions}$, like the $\text{FlexSteel}$ spoolable pipe, connect to their $\text{Cost Structure}$ and customer base in North America and the Middle East.

Cactus, Inc. (WHD) - Canvas Business Model: Key Partnerships

You're looking at the critical external relationships Cactus, Inc. (WHD) is using to secure its growth and manage costs as of late 2025. These aren't just vendor agreements; they are structural elements of the business.

The most significant recent development is the joint venture with Baker Hughes Company. This move fundamentally reshapes Cactus, Inc.'s international footprint and capital structure. Here's the quick math on that deal, which was expected to close in the second half of 2025.

The SPC business, which Cactus, Inc. is gaining majority control over, is heavily weighted internationally, which helps diversify revenue away from domestic cycles. As of December 31, 2024, approximately 85% of its revenue came from the Middle East.

The partnership with National Energy Services Reunited (NESR) is key for international deployment, specifically for frac rental equipment in the Middle East and North Africa (MENA) region. This leverages NESR's market access to grow Cactus, Inc.'s rental business, which was responsible for 19% of total revenues back in 2020. While specific 2025 deployment numbers aren't public, the strategic intent is clear: extending the U.S. unconventional basin model abroad.

Managing raw material costs is a constant pressure point. For instance, in the third quarter of 2025, Cactus, Inc.'s Pressure Control segment saw operating income increase due to cost reduction initiatives, but the overall company faced higher input costs generally, which impacted segment EBITDA margins sequentially.

To mitigate risks like the U.S. doubling steel import tariffs to 50% effective June 4, 2025, Cactus, Inc. is focused on supply chain adjustments. The move to use supply chain partners in Vietnam is a direct response to this protectionist environment, where some Vietnamese goods faced up to 46% tariffs effective April 2025. This is part of a broader strategy, as the company seeks to avoid domestic tariff impacts on materials like steel, which is a critical component for their equipment.

The reliance on strategic suppliers for raw materials like steel and components is managed through these broader geographic shifts. You can see the impact of input costs generally, as Q3 2025 saw Corporate and Other expenses include $3.2 million in transaction-related professional fees for the Baker Hughes SPC acquisition, which is a cost of strategic partnership integration.

Finance: draft 13-week cash view by Friday.

Cactus, Inc. (WHD) - Canvas Business Model: Key Activities

You're looking at the core engine of Cactus, Inc. (WHD) as of late 2025, focusing on what the company actually spends time and money doing to generate revenue. The numbers we have are primarily from the third quarter of 2025, which gives us a solid, recent look at the operational rhythm.

Design and manufacture highly engineered pressure control equipment.

This activity sits squarely within the Pressure Control segment, which is the historical core of Cactus, Inc. For the third quarter of 2025, this segment brought in revenues of $168.7 million. That figure represented a sequential decline of 6.2% compared to the second quarter of 2025, largely driven by lower sales of wellhead and production related equipment due to reduced activity levels in the quarter. Despite the revenue dip, the segment showed operational efficiency improvements; its Adjusted Segment EBITDA was $55.2 million, and the segment saw its margins increase by 290 basis points sequentially, partly due to cost reduction initiatives. Overall consolidated revenue for Cactus, Inc. in Q3 2025 was $264.0 million, with an Adjusted EBITDA of $86.9 million and an Adjusted EBITDA margin of 32.9%.

Provide mission-critical field services and equipment maintenance.

Field services are bundled with equipment sales and rentals within the Pressure Control segment reporting. The lower rental revenues contributed to the sequential revenue decrease in Q3 2025. To keep the service side sharp, Cactus, Inc. is mindful of capital allocation. Net capital expenditures for the third quarter of 2025 totaled $8.2 million. The company's full-year 2025 net capital expenditure guidance remains in the range of $40 to $45 million, which supports both manufacturing efficiency and service capability enhancements.

Manage the global supply chain, including the Vietnam facility ramp-up.

Supply chain management is a major focus, especially as the company integrates new international operations. The full-year 2025 net capital expenditure guidance of $40 to $45 million explicitly includes capital directed towards supply chain diversification efforts. Furthermore, the company's Q2 2025 capital expenditure outlook reduction to this range still accounted for spending to support the Vietnam production growth, which included a $6,000,000 equity investment made in the first quarter of 2025. The Spoolable Technologies segment, which uses the FlexSteel product line, generated revenues of $95.2 million in Q3 2025, showing a smaller sequential decline of only 1.0%, partially offset by strong international sales, which speaks to the global supply chain's reach.

Here's a quick look at the segment performance influencing supply chain and manufacturing decisions:

Execute the integration of the acquired Baker Hughes SPC business.

This is a significant near-term activity, as Cactus, Inc. announced the plan to acquire a 65% controlling interest in Baker Hughes' Surface Pressure Control (SPC) business on November 10, 2025. The upfront consideration for this 65% stake is $344.5 million, based on a total enterprise value of $530 million for the business. The SPC business brings a substantial product and aftermarket service backlog of $600+ million as of December 2024, which is expected to provide strong revenue visibility. Geographically, about ~85% of SPC's revenue is generated in the Middle East, which diversifies Cactus, Inc.'s footprint away from its existing U.S. focus. The company anticipates realizing expected annualized cost synergies of $10 million within 12 months of closing, which is targeted for early 2026. Integration costs are already showing up; Q3 2025 Corporate and Other expenses included $3.2 million of transaction-related expenses for this announced plan. The company had $445.6 million in cash and cash equivalents as of September 30, 2025, to help fund the deal.

Cactus, Inc. (WHD) - Canvas Business Model: Key Resources

You're looking at the core assets Cactus, Inc. (WHD) relies on to deliver its value proposition in the oil and gas equipment and services sector. These aren't just line items; they are the tangible and intellectual foundations of the business as of late 2025.

The intellectual property around wellhead and pressure control technology is central. This includes the proprietary Cactus™ SafeDrill® Wellhead Systems. These systems use lock ring technology and a straight bore design, making installation safer, easier, and faster than older methods, which is a big deal for maximizing pad drilling efficiency. For instance, the SafeDrill® MBU-4T model accommodates four casing strings and features a Quick Connect feature for rapid Blowout Preventer (BOP) and TA Cap installation. The design eliminates lock screws, which removes potential safety issues and leak paths, allowing technicians to secure casing strings safely from the rig floor without descending into the well cellar. This technology is a key differentiator in their offering.

Financially, the balance sheet strength provides significant operational flexibility. As of the close of the third quarter of 2025, Cactus, Inc. reported cash and cash equivalents of $445.6 million, with no bank debt outstanding. This robust liquidity position, coupled with $223.2 million in availability on their revolving credit facility as of September 30, 2025, underpins their ability to manage working capital fluctuations and pursue strategic moves, like the planned acquisition of a majority interest in Baker Hughes' Surface Pressure Control business.

The physical footprint supporting manufacturing and service delivery is extensive across key regions. This network is critical for supporting the direct sales and rental model. Here's a look at the geographic spread of their operational centers:

The company also maintains a workforce of specialized talent. As of late 2025, Cactus, Inc. reports a total of approximately 1.6K full-time employees. A significant portion of this resource is dedicated to specialized engineering and mission-critical field services.

These personnel are essential for:

• Providing service crews for installation and maintenance of wellhead and pressure control equipment.
• Executing repair services for sold or rented equipment.
• Supporting the ramp-up of the Vietnam plant, which is expected to displace Chinese imports by mid-2025.
• Managing the integration planning for the pending acquisition, expected to close in early 2026.

The company is also actively expanding its international service capabilities, targeting first unconventional shipments in the Middle East and Africa in early 2026.

Cactus, Inc. (WHD) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Cactus, Inc. (WHD) for their wellsite needs, which really boils down to engineering quality and operational flexibility, especially now, post-Q3 2025.

Highly engineered, reliable wellhead and pressure control systems.

Cactus, Inc. delivers products like the SafeDrill® wellhead systems, conventional wellheads, and production valves. These are the things that keep pressure contained and operations running safely. The commitment to engineering shows up in the margins; the company posted an overall Adjusted EBITDA Margin of $\mathbf{32.9\%}$ for the third quarter of 2025. The Pressure Control segment, which houses much of this equipment, brought in $\mathbf{\$168.7}$ million in revenue for Q3 2025. That segment also managed to post an Adjusted Segment EBITDA figure higher than estimates, even with lower activity.

The value proposition here is reliability, which translates to better financial performance for the customer by avoiding downtime. Still, you see the market pressure; Pressure Control revenue was down from $\mathbf{\$185.1}$ million in the year-ago quarter.

Capital-light rental model for frac and production equipment.

Part of the offering involves renting equipment for completion and production phases. This rental component is embedded within the Pressure Control segment, and we saw its impact in the Q3 2025 results, as lower rental revenues contributed to the segment's sequential revenue decrease. This model helps customers manage capital expenditure by offering operational access without full ownership, a key benefit when activity levels shift.

Enhanced operational efficiency for onshore unconventional wells.

Efficiency is baked into how Cactus, Inc. manages its own costs, which benefits the customer through stable pricing or better service delivery. For instance, the company improved its overall Adjusted EBITDA margin to $\mathbf{32.9\%}$ in Q3 2025, up from $\mathbf{31.7\%}$ in Q2 2025, largely due to implementing cost reduction initiatives. The overall Net Income Margin for the quarter was $\mathbf{19.0\%}$. You can see the segment-level economics here:

The company, with a market capitalization around $\mathbf{\$2.9}$ billion as of late 2025, is focused on maintaining profitability even as activity dips.

Spoolable pipe technologies (FlexSteel) for faster, lower-cost installation.

The FlexSteel technology, which combines steel durability with spoolable flexibility, is a major differentiator. This technology has a significant track record, enabling the installation of more than $\mathbf{100}$ million feet of pipe globally. The Spoolable Technologies segment posted revenues of $\mathbf{\$95.2}$ million in Q3 2025, showing strength from international sales that partially offset lower domestic activity. This segment's value proposition is speed and reduced installation cost, which is why international sales provided a boost when domestic drilling slowed. Cactus, Inc., which employs about $\mathbf{1.6}$K people, is also preparing to integrate the Baker Hughes Surface Pressure Control business, which will further enhance its surface equipment portfolio.

The core value is delivering specialized, durable pipe that installs quicker than traditional methods. That's a tangible time and cost saving on the wellsite.

Finance: draft 13-week cash view by Friday.

Cactus, Inc. (WHD) - Canvas Business Model: Customer Relationships

You're looking at how Cactus, Inc. (WHD) locks in its business, and it really comes down to direct access and long-term support. The company doesn't rely on layers of distributors for its core wellhead and pressure control gear; it's a direct line to the customer.

The sales motion is built around major oil producers and the independent operators who drive the daily drilling and completion activity. This direct approach is key to understanding their recent financial performance. For instance, the Trailing Twelve Months (TTM) revenue ending September 2025 hit \$1,090 Million. This revenue stream is fed by direct engagement, not channel partners.

Field service is where the relationship deepens. Cactus, Inc. deploys dedicated field service crews for installation and maintenance, which is critical for high-pressure equipment. This isn't just about selling a valve; it's about ensuring uptime. The focus on service quality is reflected in the segment profitability targets; for example, the Pressure Control segment's Adjusted EBITDA margin guidance for the fourth quarter of 2025 is expected to be in the 31% to 33% range. This margin profile suggests strong revenue capture from ongoing support activities.

Engagement with key clients is high-touch. You see this in how they manage their product lines. The Pressure Control segment saw its revenue decrease by 6.2% sequentially in Q3 2025, partly due to lower rental revenues, which are inherently relationship-driven. Conversely, the Spoolable Technologies segment saw revenue increase by 3.9% sequentially in Q2 2025 due to higher domestic customer activity. These fluctuations show the direct link between customer activity and Cactus, Inc.'s top line.

Long-term service contracts are the bedrock for recurring aftermarket revenue, providing stability even when new equipment sales slow. The strategic move to acquire a 65% majority interest in Baker Hughes' Surface Pressure Control Business (SPC), expected to close in the second half of 2025, is a massive play on this relationship model. This acquisition brings visibility from SPC's \$600 + Million product and aftermarket service backlog as of December 31, 2024. Plus, SPC's revenue profile is heavily international, with $\sim 85\%$ generated in the Middle East, which diversifies the customer base away from purely domestic cycles. This acquisition helps Cactus, Inc. secure future service revenue streams globally.

Here's a quick look at the financial footing that supports this service-intensive model, showing a capital-light approach that keeps them flexible:

The company maintains relationships through its two primary segments, Pressure Control and Spoolable Technologies. The Pressure Control segment sells and rents equipment under the Cactus Wellhead brand name through service centers, which is the physical manifestation of this customer relationship strategy. The Spoolable Technologies segment, while seeing a $\mathbf{1\%}$ sequential revenue dip in Q3 2025, still relies on domestic customer activity levels for its performance. If onboarding takes 14+ days for new service agreements, churn risk defintely rises, so speed is paramount.

The direct sales and service model is supported by strong liquidity, as evidenced by cash reserves of \$347.7 Million as of March 31, 2025, allowing them to fund service infrastructure and strategic growth like the SPC deal without heavy reliance on external borrowing, given the $\mathbf{0.01}$ debt-to-equity ratio.

You can see the direct impact of customer activity on the quarterly results:

• Q2 2025 Spoolable Technologies revenue up $\mathbf{3.9\%}$ sequentially due to higher domestic customer activity.
• Q3 2025 Pressure Control revenue down $\mathbf{6.2\%}$ sequentially due to reduced activity levels and lower rental revenues.
• Q3 2025 Corporate and Other expenses declined $\mathbf{\$0.5}$ Million sequentially, partly due to lower transaction expenses.

Cactus, Inc. (WHD) - Canvas Business Model: Channels

You're looking at how Cactus, Inc. gets its engineered wellheads and pressure control equipment-which it sells and rents-into the hands of Exploration & Production (E&P) companies, primarily for onshore unconventional wells. The channel strategy relies heavily on direct interaction and a strong physical footprint where the drilling and completion work happens.

Direct Sales and Field Service

Cactus, Inc. employs a direct sales model, meaning the company manages the customer relationship without relying on third-party distributors for core sales activities. This direct approach supports their robust field service capabilities, which are crucial for supporting equipment during the drilling, completion, and production phases of customer wells. The company has approximately 1.6K full-time employees as of late 2025, many of whom support this direct channel and service network.

The sales focus is clearly on the Pressure Control segment, which generated revenue of $169 million in the third quarter of 2025, and the Spoolable Technologies segment, which brought in $95 million in the same period. Overall, total revenue for the third quarter of 2025 was $264 million.

Geographic Footprint and Service Centers

The physical infrastructure supporting these channels is concentrated in key operational areas. Cactus, Inc. maintains a network of service centers and yards throughout North America, specifically in US land basins, to provide rapid support for its pressure control equipment. This is complemented by an established legacy business and service presence in Australia.

The company's manufacturing base is strategically located across the U.S.A, China, and Vietnam, with the Vietnam plant ramping up shipments to displace Chinese imports by mid-2025.

Here is a breakdown of the key operational and geographic areas Cactus, Inc. serves:

International Expansion and Offices

Cactus, Inc. is actively expanding its global reach beyond its core US market. The company explicitly targets international opportunities, especially in the Middle East and Africa, with meaningful ramp-up expected by the fourth quarter of 2026 into 2027. This expansion is supported by international sales offices and vendor approvals in regions like the Kingdom of Saudi Arabia.

The technology segment revenue, which includes international sales, saw higher international sales in Q3 2025, helping to offset lower domestic activity. The company is progressing with the planned acquisition of a majority interest in Baker Hughes' Surface Pressure Control business, which is expected to provide a broader geographic footprint upon closing in early 2026.

Rental Fleet Distribution

A significant portion of the Pressure Control segment involves the rental of equipment, including for fracturing operations. This rental distribution channel is a key component of the business, though it faced near-term headwinds. For instance, in the second quarter of 2025, Pressure Control revenue decreased by 5.5% sequentially, driven partly by lower rental business revenue.

Looking ahead to the fourth quarter of 2025, the company anticipates further deterioration in the frac rental business, where Cactus is choosing to sideline equipment rather than deploy it into a shrinking market. The outlook for the Pressure Control segment revenue in Q4 2025 is expected to be flat versus Q3 2025, with Adjusted EBITDA margins in the 31-33% range.

The rental fleet is used for pressure control and frac equipment, supporting customers during the completion phase of their wells. The company generated $82.8 million in cash flow from operations in the second quarter of 2025, which helps fund and manage this asset-heavy rental distribution channel.

Cactus, Inc. (WHD) - Canvas Business Model: Customer Segments

You're looking at the core customer base for Cactus, Inc. (WHD) as of late 2025, which is heavily segmented by the type of oilfield equipment they purchase, reflecting the Company's two reporting segments: Pressure Control and Spoolable Technologies.

The primary customer groups Cactus, Inc. serves are:

• Onshore unconventional oil and gas operators in North America.
• International E&P companies, especially in the Middle East and Africa.
• Drilling contractors requiring specialized pressure control equipment.
• Customers needing spoolable pipe for production and flowlines.

The Company's Q3 2025 revenue of $264.0 million shows the immediate split between the equipment types these customer groups demand. The Pressure Control segment, which includes wellhead and production related equipment, generated $169 million in revenue for Q3 2025. The Spoolable Technologies segment, serving flowline and production needs, brought in $95 million for the same period.

Geographic diversification is a key focus, especially following the planned acquisition of the Baker Hughes Surface Pressure Control Business (SPC). This move is specifically targeting international E&P companies. As of December 31, 2024, the SPC business had a product and aftermarket service backlog exceeding $600 million. For the acquired SPC business, approximately 85% of its revenues were generated in the Middle East, with no material U.S. external sales reported. This directly bolsters Cactus, Inc.'s reach to international E&P companies, with first unconventional shipments expected in the Middle East and Africa in early 2026.

Here's a quick look at the segment revenue contribution based on the latest reported quarter:

The trailing twelve months (TTM) revenue ending September 2025 was $1,090 Mil. The Company maintains a strong liquidity position to support these customer relationships, reporting cash and cash equivalents of $445.6 million as of September 30, 2025, with no bank debt outstanding.

Cactus, Inc. (WHD) - Canvas Business Model: Cost Structure

You're looking at the major drains on Cactus, Inc. (WHD)'s bottom line as of late 2025. The cost structure is heavily influenced by material costs, strategic investments, and the overhead of managing growth and integration activities.

High cost of goods sold due to manufacturing and raw material (steel) tariffs.

The cost of goods sold (COGS) is under pressure, directly linked to raw material volatility, specifically steel. In 2025, the environment saw tariffs increase, which feeds directly into input costs. For instance, in early June 2025, new tariffs doubled pre-existing steel and aluminum duties from 25% to 50%. Cactus, Inc. (WHD) noted in its Q3 2025 commentary that the increase in inventory carrying value was largely due to tariffs rather than increased quantities of inventory on hand. This input cost pressure was cited as a reason for operating income decreasing sequentially in Q3 2025. The company has been actively mitigating this through supply chain diversification, such as accelerating production from Vietnam.

Significant capital expenditure on manufacturing, guided to $40M-$45M for 2025.

Cactus, Inc. (WHD) has maintained a significant capital expenditure (CapEx) program focused on manufacturing efficiency and supply chain resilience. For the full year 2025, the company guided net capital expenditures to be in the range of $40 million to $45 million. This spending is specifically directed towards supply chain diversification efforts and efficiency improvements at the Baytown manufacturing facility. For context on the quarterly spend, net CapEx was approximately $8.2 million during the third quarter of 2025. Net CapEx excluding the equity investment in Vietnam was approximately $9 million during the first quarter of 2025.

Here's a look at the recent CapEx and related cash flow:

Field service and personnel costs for installation and maintenance.

While direct figures for ongoing field service and maintenance personnel costs aren't broken out separately in the immediate reporting, costs related to organizational right-sizing and personnel actions provide a view into fluctuating labor-related expenses. The company has been taking actions to adjust its organization to lower activity levels.

• Continued severance actions totaled $247,000 in Q3 2025 adjustments to EBITDA.
• Initial phase of severance actions taken in June totaled $177,000 in Q2 2025 adjustments to EBITDA.

These costs are separate from the general employee compensation embedded within Cost of Sales and SG&A, but they reflect the dynamic nature of managing personnel expenses against market activity.

Transaction-related professional fees, e.g., $3.2 million in Q3 2025.

A notable component of the cost structure, particularly at the corporate level, relates to strategic transactions. The announced plan to acquire a majority interest in Baker Hughes' Surface Pressure Control business drove significant professional fees. In the third quarter of 2025, transaction-related professional fees amounted to exactly $3.2 million, which was included in the Corporate and Other expenses. This was slightly lower than the $3.5 million recorded in Q2 2025 for similar fees related to the acquisition plan. For comparison, Q1 2025 Corporate and other expenses were up sequentially due to professional fees associated with evaluating growth initiatives, totaling $3.5 million in adjustments to total company EBITDA.

You need to track these one-time items closely; they skew the operating expense view. Finance: draft 13-week cash view by Friday.

Cactus, Inc. (WHD) - Canvas Business Model: Revenue Streams

The Trailing Twelve Month (TTM) revenue for Cactus, Inc. (WHD) was approximately $1.09 Billion as of late 2025, based on data ending September 30, 2025.

The composition of Cactus, Inc. (WHD) revenue streams is heavily weighted toward product sales, with equipment rentals and field services contributing smaller, yet significant, portions of the total top line.

You can see the primary revenue drivers below. The company relies on direct sales of its core engineered products.

• Product sales (wellheads, valves), representing about 75% of total revenue.
• Equipment rentals (frac and production), about 9% of total revenue.
• Field service and other activities, about 16% of total revenue.

For a more granular look at the most recent reported quarter, Q3 2025 revenue totaled $264 million. This quarterly revenue was split between the two main operational segments:

• Pressure control segment revenue: $169 million.
• Technology segment revenue: $95 million.

The Pressure Control segment revenue of $169 million in Q3 2025 was noted as being down 6.2% sequentially, driven primarily by lower frac rental revenues. The Technology segment, which includes Spoolable Technologies, brought in $95 million, down 1% sequentially, with higher international sales offsetting lower domestic activity.