Tidewater (NYSE:TDW) executives said the offshore vessel operator delivered its strongest year in recent memory in 2025, highlighted by nearly $600 million in EBITDA and about $430 million in free cash flow, while also outlining an acquisition in Brazil and an updated 2026 outlook that incorporates the pending deal.
2025 performance and fourth-quarter results
President and CEO Quintin Kneen said 2025 unfolded largely as the company expected despite softer offshore drilling demand and macro uncertainty, with Tidewater posting year-over-year revenue growth, gross margin expansion, and higher average day rates. For the year, the company generated adjusted EBITDA of $598.1 million and free cash flow of $426 million, according to CFO Sam Rubio.
Rubio said fourth-quarter net income was $219.9 million, or $4.41 per share, and included a tax benefit tied to a strategic realignment of vessel ownership. For the full year, Tidewater reported net income of $334.7 million versus $180.7 million in 2024; included in 2025 results was a one-time non-cash tax benefit of $201.5 million, primarily related to the utilization of foreign tax credits previously subject to valuation allowances.
Operationally, Rubio said active utilization for the full year dipped slightly to 78.7% due to more idle days, partially offset by fewer dry dock and repair days, while average day rates rose $1,300 per day year-over-year to $22,573. In the fourth quarter, average day rates fell about 3% sequentially, but active utilization increased to 81.7% from 78.5%, which Rubio said was the highest since the first quarter of 2024.
Free cash flow and balance sheet
Tidewater generated $151.2 million of free cash flow in the fourth quarter, up from $82.7 million in the third quarter. Management attributed the quarter’s step-up primarily to working capital benefits from improved cash collections and to lower dry dock spending. Rubio said a large contributor was collections related to Tidewater’s largest customer in Mexico, where the receivable balance declined by more than $40 million, lowering days sales outstanding (DSO) by 14 days quarter-over-quarter.
Kneen said the company ended 2025 with nearly $580 million of cash on the balance sheet. He reiterated that management did not want to accumulate excess cash without putting it to “more productive, economically accretive use.”
Wilson Sons UltraTug Offshore acquisition and capital allocation
After quarter end, Tidewater announced an agreement to acquire Wilson Sons UltraTug Offshore for $500 million. Senior Vice President of Strategy, Corporate Development, and Investor Relations West Gotcher said Tidewater expects to finance the transaction with cash on hand and the assumption of approximately $261 million of debt from BNDES and Banco do Brasil. Gotcher said the assumed debt carries a weighted average cost of 3.6% and amortizes through 2035, with no single year creating a significant maturity concentration for Tidewater.
Assuming a June 30, 2026 closing date, Gotcher said Tidewater expects net leverage to remain below 1x, consistent with management’s stated leverage framework. He also reviewed flexibility under Tidewater’s capital return constraints, including leverage tests tied to the company’s unsecured bonds and revolving credit facility.
Kneen said Tidewater did not repurchase shares in the fourth quarter as it worked on the acquisition, but the company retains a $500 million share repurchase authorization, which management said represented about 13% of shares outstanding as of the prior day’s close. Rubio added that while Tidewater did not repurchase shares in the third or fourth quarter, it spent $98 million during 2025 to reduce about 2.8 million shares year-on-year (including shares withheld to cover roughly $8 million in taxes related to vesting of employee awards).
2026 guidance and contracting commentary
Gotcher said Tidewater updated its full-year 2026 guidance to include the Wilson Sons UltraTug Offshore acquisition, assuming a mid-year closing. The company raised revenue guidance to $1.43 billion to $1.48 billion and projected a full-year gross margin of 49% to 51%. He said the updated guidance reflects the addition of the Wilson fleet and does not assume changes to guidance for the legacy Tidewater business, though management sees potential upside if drilling activity strengthens toward year-end.
Gotcher said firm backlog and options in January for the legacy fleet represent approximately $1.1 billion of revenue for the full year, or about 80% of the midpoint of the legacy revenue guidance, with roughly 65% of available days captured in firm backlog and options. The revenue outlook assumes utilization of about 80%, leaving approximately 11% of capacity available should the market tighten faster than expected. He said the largest opportunity for incremental work sits with the company’s largest PSVs and anchor handlers, followed by mid-sized anchor handlers and small and mid-sized PSVs.
On pricing, Gotcher said weighted average leading-edge day rates were down slightly in the fourth quarter compared to the third quarter, as Tidewater entered into 21 term contracts averaging six months in duration to maintain vessel availability for opportunities later in the year. In the question-and-answer session, management characterized 2026 day rates as “flattish,” with Kneen and COO Piers Middleton pointing to increasing tender and pre-tender discussions and expressing optimism about tighter conditions later. Kneen said that if the market tightens, he would “hope” to see day rates climb in 2027 and 2028 by $3,000 to $4,000 per day, noting pricing can respond quickly when demand exceeds supply.
Rubio provided additional 2026 cost and capital details, including expectations for standalone G&A of about $123 million (including an estimated $15 million of non-cash stock compensation) excluding additional M&A costs, plus approximately $7 million of incremental G&A in the second half tied to the Wilson acquisition. He projected 2026 dry dock costs of about $122 million (including $46 million of engine overhauls), with dry dock days expected to reduce utilization by about five percentage points, and said Tidewater anticipates about $51 million of 2026 capital expenditures, including a planned major upgrade to a Norwegian vessel supported by a customer contract.
Regional market conditions and Middle East risk
Middleton outlined region-by-region conditions, describing the Mediterranean as potentially “very active” with oil majors announcing and tendering drilling programs for 2026 and EPCI projects starting during the year. He said Norway appears set for “a good few years ahead,” and pointed to early signs of large AHTS spot rates cresting over $100,000 per day in the U.K. and Norway, though he emphasized these were very short-term contracts.
In Africa, Middleton said sentiment remained cautiously optimistic, citing strengthening drilling activity in West Africa, tendering in Namibia, and project activity in Mozambique and Angola. In the Americas, he said the Gulf of Mexico outlook looked “flat at best,” while management expressed cautious optimism around increased tendering in Mexico later in the year and described long-term prospects in Brazil as a key rationale for the Wilson acquisition.
Management also addressed geopolitical developments in the Middle East. Kneen said Operation Prosperity Guardian had introduced uncertainty, but the company had not seen “real changes” so far. He said Saudi Arabia represented 80% of the segment’s 2025 revenue and remained “business as usual,” while vessels in the UAE and Qatar were safely in port and still on hire. He said higher insurance costs were expected but would be immaterial, and noted rising diesel costs are a pass-through to customers. In Q&A, Kneen said he was not concerned at present and emphasized safety as the priority.
About Tidewater (NYSE:TDW)
Tidewater Inc is a leading global provider of offshore marine support vessels, serving the energy sector with a focus on the oil and gas industry. Headquartered in Houston, Texas, the company operates a diverse fleet of platform supply vessels (PSVs), anchor handling tug supply vessels (AHTSs), crew boats and other specialized vessels designed to support offshore drilling, production and construction activities.
The company’s fleet is equipped to handle a range of maritime services, including the transport of personnel, equipment and bulk materials; anchor handling and mooring operations; and subsea construction support.
