Thank you, Dennis, and good morning, everyone, and thank you for joining TETRA's second-quarter earnings call. The speakers on today's call will be Brady Murphy, President and CEO, and Matt Sanderson, Chief Financial Officer.

Before we begin, I would like to call your attention to the Safe Harbor statement in our Form 10-Q. Some of the remarks we make today may be forward-looking and are subject to risks and uncertainties as outlined in our SEC filings, and actual results may differ materially from those expressed or implied.

In addition, we may refer to adjusted EBITDA, free cash flow, and other non-GAAP financial measures. Please refer to our press release for GAAP reconciliations, and note that these reconciliations are not a substitute for GAAP financials.

As such, we encourage you to refer to our 10-Q. After Brady and Matt provide their comments, we will open the line for Q&A.

I will now turn the call over to Brady.

Thank you, Kurt, and good morning, everyone. I'm really pleased with our second-quarter results across many fronts.

Financially, we delivered one of the best second quarters and first six months of the year in the past decade. We accomplished this through the strength of our deepwater market share and our growing international business despite the impact of the Middle East conflict.

I'll come back to the financials shortly, but we also reached some really strategic milestones in the second quarter that are setting us up very well to achieve our 2030 targets that we laid out at our Investor Day in September of last year. For our deepwater markets, we expanded our patented TETRA Neptune completion fluid offering with the introduction of TETRA Neptune Z-Lite, a high-value deepwater completion fluid that leverages our TETRA Neptune chemistry to achieve higher densities while significantly reducing zinc content.

We were especially pleased to be awarded a Beacon Offshore Energy contract to deploy TETRA Neptune Z-Lite in a three-well 20,000 psi Gulf of America program. During the quarter, our board of directors approved the final investment decision for our Arkansas bromine project.

Proceeds of approximately $108 million from our recent completed equity offering will be used to fund a portion of the anticipated project costs, with the balance of such costs to be funded by cash from operations, borrowings from our credit facilities, or alternative sources of capital. This project will provide a pathway to meet our growing deepwater completion fluids market as well as our increasing electrolyte demand while providing significant benefits for security of supply at a lower cost.

The project is on schedule for completion in the fourth quarter of 2027 and startup in early 2028. We advanced our TETRA Oasis TDS desalination solution for produced water on several fronts as our customer engagements continued to expand.

At the request of our customers to meet data center requirements for larger volumes of water, we made significant progress on the engineering design of our 100,000-barrel-per-day desalination plant. Very importantly, we also strengthened our intellectual property position, receiving notices of allowance that expand the scope of our TETRA Oasis TDS patented portfolio to include a broad range of pretreatment technologies critical to long-term membrane performance.

As you can see, it's been a very busy and very productive second quarter for us. Coming back to our financials, overall for the company, our second-quarter revenue increased 19% sequentially and 7% year-over-year to $185.7 million.

Adjusted EBITDA increased 24% sequentially to $31.9 million. Income from continuing operations was $10.2 million.

Internationally and globally offshore, our revenues for both the second quarter and the first six months of the year reached 10-year highs. First-half 2026 international revenue was 24% higher than the first-half period over the past decade.

Our international business was led by Argentina, where we're on pace to double our growth in '26 over '25 behind the strength of our early production systems and the TETRA SandStorm technology. For offshore, despite the delay of some fluid sales to the Middle East region due to the conflict, our international offshore revenues were 59% above the closest second quarter in the past 10 years.

In Completion Fluids & Products, revenue increased 23% sequentially and 3% year-over-year, delivering the highest first-half revenues again in 10 years. Sequential growth was driven by increased sales activity from our Europe and Caspian region, which more than offset some fluid shipments that were delayed as a result of the Iran conflict.

Chemicals also delivered a first-half revenue record, supported by seasonal demand in Europe and increased electrolyte sales. Demand for TETRA PureFlow zinc bromide electrolyte that we manufacture also continued to accelerate during the quarter, supported by expanding customer manufacturing capacity and increasing customer backlog.

We believe the growing requirement for grid resiliency, reliable power infrastructure, and long-duration energy storage are expanding the addressable market for zinc bromide battery technology. Adoption is also increasing across defense and critical infrastructure markets.

In Water & Flowback Services, revenue increased 12% sequentially and 13% year-over-year, led by record second-quarter revenues from Argentina from our early production projects and in the Vaca Muerta Basin. Our Water & Flowback business continued to materially outpace the year-over-year decline in US frac activity, leaving us well positioned to capture incremental upside from any recovery.

Looking forward, the business outlook is very positive, and we believe we're on track with our 2030 objectives and financial targets. Our deepwater and international activity remains strong, and the US is showing signs of improvement.

The Middle East conflict continues to introduce some unpredictability and uncertainty, but so far the strength of TETRA's other markets and our security of supply, particularly for bromine-based completion fluids, have more than offset delays or losses in the Middle East sales. Our patented SandStorm continues to gain market share in the US and is becoming a standard technology for key customers in some international markets.

As announced, we expect the first of three TETRA Neptune Z-Lite wells to be executed in 2026. With regards to TETRA Neptune, our pipeline of projects is the strongest it has ever been as deepwater offshore exploration, development activities continue to shift to deeper, higher-pressure, and higher-temperature reservoirs.

This is creating additional opportunities for TETRA Neptune fluids, which is designed to address higher pressures while also lowering corrosion chemistry in downhole wells and flowback conditions. We're encouraged by Eos's progress with their new automated manufacturing line and their confidence in having their stated capacity of 4 GWh by year-end and heading into 2027.

Our calcium chloride business continues to meet new production and revenue records and finds new markets to grow at rates that exceed GDP. For the remainder of 2026, we expect our base business to perform in line with market expectations, while recognizing that the Middle East conflict introduces a level of market unpredictability and also the timing of planned and potential Neptune jobs in our growing pipeline could make a meaningful impact to our second-half 2026 results.

Beyond 2026, we see multiple drivers supporting continued growth, including increased deepwater completion activity, further expansion of our long-duration energy storage electrolyte business, and the commercialization of our Oasis TDS produced water desal solution. The startup of our Arkansas plant, planned in early '28, will have a material impact on both our supply and cost of bromine to meet our growing demands for both completion fluids and electrolytes.

We continue to evaluate our next steps in Arkansas, with our broader resource position providing meaningful additional strategic value. TETRA controls 40,000-acre Smackover mineral position in southwest Arkansas, with exposure to lithium and magnesium, two critical minerals benefiting from improving market fundamentals and growing US supply chain priorities.

Our portfolio includes lithium royalty rights on approximately 35,000 acres held by Smackover Lithium, a 65% ownership interest in an estimated 585,000 tons of lithium carbonate equivalent in our Evergreen unit, and more than 2 million tons of measured and indicated magnesium resources. Given the increasing focus on domestic critical mineral supply chains, energy security, and strategic resource development, as well as the significant synergies with our bromine investment, we see potential opportunities to accelerate the development and monetization of our lithium and broader critical minerals platform.

While our real-term execution priority remains the Arkansas bromine facility, we believe the embedded value of our lithium and magnesium resources represents an important source of optionality and potential long-term shareholder value. With that, I'll turn the call over to Matt to discuss our financial results in more detail.

Thank you, Brady. Good morning, everyone.

Second-quarter revenue was $185.7 million compared with $156.3 million in the first quarter of this year and $173.9 million in the second quarter of 2025. Despite broader market volatility throughout the quarter, as Brady mentioned, both international and global offshore revenues achieved 10-year highs for the second quarter and the first half of the year.

Income from continuing operations was $10.2 million compared with $8.3 million in the first quarter and $11.3 million in Q2 of last year. Adjusted EBITDA was $31.9 million, which increased sequentially from $25.6 million in the first quarter and down from $36.2 million in the second quarter of 2025, where we completed a three-well TETRA Neptune project, which was not expected to repeat this year.

Adjusted EBITDA margin was 17.2% of revenue in the second quarter, increasing sequentially from 16.4% in the first quarter and was down from 20.8% in the second quarter of 2025, again resulting from the completion of a TETRA Neptune project in Q2 of last year. Completion Fluids & Products revenue was $113.1 million, net income before taxes was $27.2 million, and adjusted EBITDA was $29.9 million.

Adjusted EBITDA margin was 26.4%, which aligned with our previously guided expectation of historical margins for this segment. Revenue increased 23% sequentially and 3% year-over-year, supported by bromine-based clear brine fluid spot sales in the European region, seasonal calcium chloride demand for dust binding, and increased TETRA PureFlow electrolyte sales that Brady mentioned previously.

This strong performance was achieved despite the broader market volatility, delayed fluid shipments into the Middle East, and the increased cost of third-party bromine that we mentioned on previous earnings calls. Water & Flowback Services revenue was $72.5 million, net income before taxes was $3.2 million, and adjusted EBITDA was $10.8 million.

Adjusted EBITDA margin was 14.8%, which increased from 14.1% in Q1 of this year and was up from 9.9% in Q2 2025, representing a 68% increase year-on-year. As Brady mentioned, revenue increased 12% sequentially and 13% year-over-year, supported by record second-quarter Argentina revenue.

During the quarter, cash generated by operating activities was $34.4 million. Total capital expenditures were $23.3 million, inclusive of $10.9 million associated with the Arkansas bromine project and $2 million of capitalized interest.

Base business adjusted free cash flow was $22.8 million, and total adjusted free cash flow was $9.9 million. Turning to the balance sheet, as Brady mentioned, during Q2 our board of directors approved the FID of our Arkansas bromine facility, and we successfully completed a follow-on equity offering, which generated approximately $108 million of net proceeds to fund a portion of the costs associated with our bromine plant.

I would like to take this opportunity to thank our shareholders for their tremendous support. Following the equity offering, we ended the quarter with cash and cash equivalents of $154.6 million and total debt of $183.3 million.

Net debt was $28.7 million, and our net leverage ratio improved to 0.4 times. To summarize, our second-quarter results demonstrated continued strong execution in our core businesses, with consolidated revenue increasing 19% sequentially, while continuing to advance multiple growth platforms.

I will now turn the call back over to Brady for closing comments.

Thanks, Matt. As we covered during the call, the second quarter was very productive and successful on many fronts.

We're very pleased with the second-quarter financial results and the outlook going forward. We're also pleased with our ability to execute on the key strategic milestones that are critical to our One TETRA 2030 strategy.

With that, we'll open it up for questions.

Thanks. Good morning, everybody.

Morning, Stephen.

I think two things. One, you mentioned on the call and in the press release that you expect your base business to perform in line with market expectations.

When you say base business, what are you including? Are you including electrolyte sales to Eos or anything on the desal side?

How do I think about that comment?

Stephen. We would consider our base business to be our ongoing completion fluids business, our water and flowback.

We would include our electrolyte sales as part of that base business. We would not typically include Neptune-type jobs in our what is traditional our base business.

Now, obviously, we'd like to make that part of our base business, and I think it's got the potential in the future to be what we consider our base business, but we wouldn't consider that today.

Okay. All right, thanks.

That's helpful just to clarify. Then as we think about what you're seeing in the deepwater markets and the activity levels likely rising, what should we think about the timing for you on, and I'm not talking about specifically Neptune jobs, but just in total sort of deepwater fluid sales growth as we look into '27?

What's sort of the lag time we should be baking into expectations?

Yeah. As we talked about, I think earlier this year, the Gulf of America was actually a heavy drilling activity and less about completion cycle.

Quite frankly, the Gulf of America this year for us has been down compared to even prior year. We think that cycle starts to reverse in 2027, based on what we see.

Then the overall growth of the deepwater market we think will continue to rise as we go into 2027. At our Investor Day in September of last year, we had projected an 8% CAGR from where we were at at that point in time through 2030.

I would say, potentially we could even exceed that CAGR depending on how things develop, but that's certainly intact for us today.

Okay. Thank you.

Just maybe one other quick one. When you think about your expansion plans for your raw materials, how much of Eos's growth and needs is driving that need to expand your raw materials over multiple years?

Stephen, we won't give specific volumes related to Eos or bromine, but as we move into 2027 and they're assuming they're at their 4 GWh capacity, it's a material shift for us in '27. If they get to their 8 GW before 2030, which is what they've stated their objective is well before that, it will take up a meaningful part of our capacity of our new plant.

I don't know that we've given specific numbers on that, but it's a material volume.

Okay. Because I'm only asking because one of the questions we often get is, would TTI be doing this if they weren't confident in Eos?

That's the way I asked the question. Although

the business case on our bromine plant stands on its own with or without our electrolyte sales, Stephen. That's for sure.

Great. That's what I wanted to hear.

Thank you.

Hey, good morning, guys, and thank you for taking my question.

Could you give us a

could you give us a sense for how impactful the Neptune Z-Lite projects can be on financials, and then secondly, could you discuss how and why this expands the opportunities where you are well positioned to win? It seems like this is materially expand it seems like this materially expands it, just wanted to hear a bit more there.

Sure. The Z-Lite is a very important launch for us.

You've seen the financial impact when we have a Neptune job or a projects in a given quarter. If you look at a linear scale between a typical deepwater job and a full-blown Neptune job, Z-Lite is on that scale.

You can just think of it maybe as a midpoint marker if you want to think of it in that way. Probably more importantly, it expands the market opportunity for TETRA.

Zinc bromine is probably the leading high-pressure deepwater market completion fluid in the market, and some markets zinc is banned. It has some environmental challenges with it.

It has some challenges in the flowback operations of our customers' refining operations, etc. Reducing the zinc concentration in that fluid is a material value for our customers, and we think it expands the market pretty significantly for our Neptune chemistry.

Got it. Then something that really caught my attention was the wording around commercial discussions on Oasis and that you specifically call out hyperscalers being involved there where previously it was more alluded to as general data centers were likely to be demand drivers.

Maybe I'm reading too much into that, but if not, can you just touch on what's happened more recently that made you feel comfortable specifically calling out hyperscaler conversations? Look, our

our confidence of commercial projects continues to grow with with Oasis. The number of customer engagements, the quality of customer engagements, the feedback from customer engagements, their confidence in the technology, in the engineering, work that we've done.

In Q2, we had the the first time, most of our, as our customer base is the midstream folks and the E&P companies who own own the water. They are are still our our customer base, but we did have the opportunity in the second quarter at at a hyperscaler's request to to meet with us and discuss our our TETRA Oasis solution.

We we learned a lot from that process as well. It was a very valuable engagement.

Our our comfort level continues to grow. We've talked about the engineering work that we've done, the the value that we see as we scale from a small scale to 100,000 barrels per day plus the economies of scale that come with that.

There's a pretty big shift from, where we were thinking we would be this time of year when we had our Investor Day last year and where we are today with much larger-type projects that we're we're we're evaluating and being evaluated on. Our confidence is high.

Honestly, I think the gating issue that going forward we all need to be keeping eye on is is the permitting, process. The TCEQ is responsible for that.

There's there's actually six projects pending permit approval by the TCEQ. They're looking at setting a general standard discharge quality as well as as well as frequency of testing specifications.

We know they're very active with it. We're active with them.

The EPA is is actively involved. This this is gathering momentum.

It's it's going to happen, but that now is potentially a a a gating item in terms of being able to finalize a a a project. So.

That's very helpful color. When you say TCEQ is the six projects pending approval, are those all Oasis, or are those for other beneficial reuse systems?

We won't we won't comment on any of the technology associated with... They're general permits that are not specific to any technology.

They're general just discharge permits for produced water.

Got it. You mentioned your historical customers and the new one's kind of coming in the fold between the midstreams, E&Ps, and the new ones as the hyperscalers.

Just from your current perspective, what are maybe the key differences within each conversation? You did mention the permitting could be a hurdle, and I would think that's probably going to be a hurdle across all three.

Are there specific hurdles you see for each type of customer, or is it just kind of those are all sort of the same between each discussion? I think

if I understand your question properly, I think that the shift that's happening right now is hyperscalers are trying to get comfortable with water-cooled systems. They have generally used air-cooled systems in a lot of their operations.

There are a lot of advantages to water-cooled systems, and in West Texas, as you can imagine, air cooling has even more challenges. As their data density increases, air cooling, in some cases, will not even be an option.

That process is ongoing. You have E&Ps and our midstream customers who were thinking of a very methodical crawl, walk, run strategy to lay out desalination plants to now looking at much larger plant facilities to service the data centers.

There's a lot of dynamics going on there. We're right in the middle of all this, and playing a big part, we feel, in all this.

Then you got the permitting issue I discussed. There's a lot of dynamics happening.

It has to get solved. AI is great, but physical laws still exist, and the disposal issue in West Texas is still a growing problem that has to be solved.

So.

Got it. Then just last one for me is on the base business.

You mentioned how SandStorm has made inroads in new markets. Just wanted to hear more about what those new markets look like and if you could touch on what factors internally or externally are helping drive those break-ins into new markets.

SandStorm has been instrumental for our growth in Argentina. As we've mentioned, we're doubling our revenues this year over last year.

We're introducing SandStorm into some of the Middle East unconventional markets, and we feel really good about some of the traction that we're seeing with it in those markets as well.

Got it. Appreciate the color, and congrats on the good quarter.

I'll return to the queue.

Thank you.

Good morning. Thank you for taking the questions.

Just wanted to ask about Argentina if you could expand a little bit more about the equipment that you're putting down there. Obviously, the SandStorms you just mentioned, production skids, anything else that maybe you wanted to highlight?

There's really two technologies that are supporting our growth down there, Marty. It's the early production facilities.

We're one of the leading providers of early production facilities, EPFs, in the market today. Then, in conjunction with that, are our SandStorms, our flowback technology.

Really that combination of flowback, early production systems, and SandStorm is what's driving our growth.

Okay. Then I just wanted to ask my last question on the deepwater completion market and specifically Gulf of America.

The wells that are being talked about in terms of potentially needing one of your solutions, are these wells that were drilled a while ago, and the higher pressure, the higher temperatures were a hurdle, and now that the technology is catching up and the companies are able to complete them? Or can you just give us a little bit more color about the opportunity set there?

I'll ask Matt to comment on that.

Marty, as you're aware, recent announcement around Z-Lite, some of the projects that we're participating in, 20,000 psi project that was referenced, some of that project's already been ongoing. However, as Brady referenced, there's been some public information out there around zinc, how it relates to production facilities, how it can relate to refineries and things like that.

TETRA, really founded on delivering commercial solutions to customer challenges. Z-Lite fits in that mold, where it's not a completely zinc-free system, but it significantly reduces the concentration of the zinc ion in those high-pressure, high-density completions in a very, I'll call it economical package, commercial solution for the customer.

We're really excited about it for the wells that are already ongoing in that market, plus also as Brady mentioned, the wells that are planned. Right?

You can see the permitting activity in the Gulf over the next several years, the reservoirs that are being targeted. They're really down in this pressure regime, really on the back of some of the companies that have already started to drill into that reservoir and prove that these can be completed.

Company like TETRA, we can bring solutions to help them do that economically, do it safely, and be a value-add.

Great. Thank you.

I'll turn it back.

Hi, good morning. Nice quarter, and thank you for taking my questions.

Morning.

Morning. I was wondering if you could dive a little bit deeper into the optionality around lithium and magnesium.

Maybe talk about the potential timeline before you want to make a decision there, the amount of investment it would take, and then the returns of profitability you might see on the back end.

Yeah. We're really excited about the optionality.

As you recall, when we did our Investor Day, we, we had laid out our 2030 targets, but we had lithium, kind of a a target out there, but beyond the year 2030. As we now move forward with the the bromine plant on schedule, on time, on budget, operational in 2028, the upstream piece of that will be in place, the investment we're making in the infrastructure around the bromine plant.

Adding lithium to to that entire plant site looks very attractive both from a capex savings, from the, not not duplicating the the the upstream as as well as the infrastructure, but also lithium prices have moved above the the $20,000 per metric ton mark compared to where we were, last September, and and the growth projections for lithium, I think have even strengthened since that time, particularly with what's, being perceived as higher oil prices going forward. We're looking at it.

We we'll we'll we'll decide at what point in time we want to engage in the engineering studies and and publish something perhaps, even before this year, the end of this year. We're definitely excited by the by the prospects.

The magnesium is probably a little bit further out, mainly because, our joint venture with Magrathea, we need to establish a a demonstration plant first to to prove out the technology. That will that would be a small-scale commercial plant, not not really a meaningful volume commercial plant before we before we engage in a a a larger commercial plant, which we'd like to be after 2030 and and after lithium.

Great. Thanks for that detail.

Then just a question on the quarter. Margins in the Completion Fluids business down sequentially despite the higher revenue.

I get that bromine price has been rising on you, it's from a third-party contract. I was wondering if there's anything else that went into that margin and kind of what we can expect in the quarters that are coming.

The mix can have an impact on our margin profile. We guided between 25% and 30% for our Completion Fluids business.

That's still intact for our base business as we move forward. We'll see when we get into next year.

We have one more year that we need to bridge until we get to the completion plant, which will be a material impact for us in terms of our cost of bromine. We have a good portion of our bromine for '27 already under contract, but we'll need to look at what that volume looks like as we get closer to the planning cycle for '27.

Got it. If I could sneak another one in there, just could you expand on the bromine optionality if perhaps Eos doesn't perform according to its projections?

Can you resell that bromine, or is there a plan to just leave it in the ground? How should we think about how you plan for capacity use here if Eos or something else doesn't quite meet expectations?

With what we're seeing in the deepwater market growth, even with the Eos if they do meet their expectations, we'll be at 100% capacity of our bromine plant, plus we'll still be buying some from the third-party markets. If Eos had challenges and did not meet the demand growth that we're planning for, we'll still be very well utilized at the plant for our existing completion fluids business, and we have the option to sell elemental bromine into the market, which is a pretty good market right now, particularly given the Middle East security supply issues, which is where most of the bromine, over 50% of the world's bromine is produced today.

Understood. Thank you.

Morning. Thanks for taking my questions.

I wanted to go back to the hyperscaler commentary just around the difference in cost between water-cooled data centers and the conventional air-cooled facilities. Could you talk about that 30% difference, what that ultimately equates to from a dollar value perspective?

The reason I ask is just because the hyperscalers have sort of come out with very aggressive budgets, and I think people are starting to look a lot differently at the money that they spend. I'm just curious from a dollar perspective what that ultimately looks like.

That that comment came directly from a a hyperscaler to us to a feedback to us in the in the discussions after, we were discussing, our our Oasis solution and, what I guess they're traditionally paying for their air-cooling systems. I can't give you a whole lot more detailed than that, but that that's just the feedback we received from that particular hyperscaler.

Thanks. Maybe just lower 48 spending, how you are seeing things unfold just sort of exiting this year into 2027.

A lot of commodity price volatility, and we've seen sort of privates have the uptick in capex. A lot of the larger companies sort of just standing pat.

Just from your discussions with your lower 48 customers, could you just give us a little more insight into what you're seeing today and how you're thinking about what they ultimately may spend in '27 or how they're thinking about the world?

I think it's a little early for us to project on 2027 spend. We are clearly starting to see some uptick in activity that impacts our business right in the second half of 2027.

You got to remember, rigs come first, they got to drill the wells, then frac crews come to frac the wells, and then we come into play for both supplying water, but also the flowback side of the business, the sand management piece. We're a little bit on the tail end of increased activity, but we're starting to see that now in the second half of this year.

Everything we're hearing about the second half of this year is slightly up as we go forward in terms of rig and frac activity. I think it's a little premature for us to speculate on '27 at this point.

Thanks. Last one for me is just on the Middle East as someone who has been operating there.

Could you just give any insight into how you're thinking about the world moving forward, discussions with customers, and after everything settles down, do you think that there's any sense that capital will sort of come back to work pretty quickly in that region? Do you think that it's structurally changed and people will be hesitant to spend in the region?

Maybe just your insights into some of the discussions you've had with customers would be great.

I think again nobody really knows how ultimately this Middle East issue will be resolved, anything we say with that regard would be speculative. One thing I think we can say with confidence is that the deepwater market is just continuing to grow.

More and more attention, support from the markets doesn't have to deal with the Middle East conflict regardless of how it's resolved. The cost of the projects, the per-barrel break-even costs continue to go lower, the efficiencies of the deepwater rigs, the production profiles of these wells.

All of these I think are building momentum around the deepwater side. How the Middle East shakes out is really very difficult for me to predict.

I would say the unconventional markets in the US and Argentina and deepwater will benefit short-term at least until things get sorted out there.

Thanks. I'll turn it back.

Thank you very much. We're excited that TETRA's positioned around really three long-term growth trends: energy security related to deepwater development, energy storage and domestic critical minerals, and sustainable water solutions for oil and gas, agriculture, and now AI infrastructure.

We're encouraged by the progress, remain focused on disciplined execution, commercial advancement, and creating long-term value for our shareholders. We appreciate your interest in TETRA Technologies, and look forward to updating you on our continued progress.

Thank you.