Tidewater's new contracts pay more. Why cut the margin outlook?
The forecast portion of conflict-related costs not contractually billable to customers has roughly doubled since August.
Ticker Byline
Tidewater Inc.
Tidewater operates offshore support vessels serving energy exploration, construction, production and offshore wind activities.
- Ticker
- TDW
- Exchange
- XNYS
- SEC CIK
- 0000098222
How Tidewater makes money
Tidewater owns and operates offshore support vessels serving energy exploration, construction and production, alongside offshore wind activities. Revenue depends on contract daily rates, the number of vessels working and the time they spend on hire.
Latest quarter and contract rates
September-quarter 2026 revenue was $360.4 million, compared with $341.1 million a year earlier. Reported net income attributable to Tidewater was $17.5 million, against a year-earlier $0.8 million loss. Operating income fell to $50.3 million from $62.7 million.
| Measure | Q3 | Q2 |
|---|---|---|
| Average realized daily rate | $23,775 | $22,938 |
| Average new term-contract daily rate | $27,373 | $24,341 |
| Active-fleet utilization | 79.2% | 81.4% |
Forecast history
| Measure | August 3: 2026 | November 9: 2026 | November 9: 2027 |
|---|---|---|---|
| Revenue | $1.42bn to $1.47bn | $1.43bn to $1.44bn | $1.70bn to $1.75bn |
| Gross margin | 49% to 50% | 47.5% to 48.5% | 51% to 53% |
The 2026 conflict-cost estimate increased from $13.1 million in August to $19.8 million in November. Contractually billable costs increased from $7.6 million to $8.7 million. The part not contractually billable rose from $5.5 million to $11.1 million, based on those forecasts.
Completed Brazilian acquisition
Tidewater completed its Wilson Sons Ultratug Offshore acquisition on August 31, 2026, adding 22 Brazilian-built platform supply vessels. Base enterprise consideration was $500 million. Cash paid at closing was $283.112 million after adjustments, and debt assumed was $214.853 million.
The acquired businesses generated $240.437 million of combined 2025 revenue and $103.059 million in the first half of 2026, after eliminating intercompany transactions. The new fleet contributes a full year in 2027, against four months in 2026.
Cash and debt
Quarterly operating cash flow was $75.221 million. The company's $90.896 million free-cash-flow measure adds back $30.814 million of cash interest, makes other adjustments and excludes acquisition spending. It therefore differs from operating cash flow less capital spending.
The quarter's acquisition cash outflow was $272.975 million after acquired cash and restricted cash. Cash and cash equivalents ended September at $390.844 million, down from $613.544 million in June. Debt at balance-sheet carrying value rose to $862.260 million from $653.203 million over the same period.
Our analysis of higher contract rates and the lower 2026 margin target explains what is changing before the stronger 2027 forecast.
Latest reporting
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