Oceaneering International (NYSE:OII) executives told investors the company closed out 2025 with what CEO Rod Larson described as “strong execution across the business,” citing pricing gains in key operations, operational delivery, and growing contributions from its Aerospace and Defense Technologies (ADTech) segment. Larson said the performance helped drive “meaningful cash generation,” with the company ending 2025 with $689 million in cash.
2025 highlights: higher margins, stronger order intake, and record safety
Larson outlined several full-year achievements, including $3.7 billion of order intake in 2025 and a book-to-bill ratio of 1.33, up from 1.1 in 2024. He said adjusted EBITDA margins expanded by 140 basis points, with year-over-year improvements in each operating segment. Oceaneering also achieved 99% ROV uptime for a second consecutive year and improved ROV pricing by 7% over the course of 2025.
Fourth-quarter results: revenue down year over year, tax benefit boosted earnings
For the fourth quarter of 2025, consolidated revenue was $669 million, down 6% versus the fourth quarter of 2024. Larson attributed the decline primarily to lower revenue in energy-focused businesses, particularly Offshore Projects Group (OPG), following an unusually high number of international intervention and installation projects in the prior-year quarter that did not repeat in 2025.
Consolidated operating income fell year over year to $65.4 million, with gains in ADTech, Manufactured Products, and Subsea Robotics (SSR) partially offset by significantly lower OPG results and lower IMDS performance. Despite the operating income decline, net income rose sharply: Oceaneering reported net income of $178 million, or $1.76 per share, up 217% year over year. Management said the increase was largely driven by a $156 million discrete tax benefit tied to the release of U.S. valuation allowances.
Adjusted EBITDA for the quarter was $90.5 million, which the company said was at the high end of its guidance range but down year over year for reasons consistent with the revenue decline. Oceaneering generated $221 million of cash from operating activities in the quarter and invested about $30 million in organic capital expenditures (roughly 55% growth and 45% maintenance). Free cash flow was $191 million, aided by the timing of customer payments, including early receipt of payments originally due in the first quarter of 2026.
Segment performance: ADTech growth, SSR margin improvement, and OPG decline
In SSR, fourth-quarter operating income rose 7% to $67.8 million on relatively flat revenue. EBITDA margins improved to 38% from 36%, driven largely by improved ROV pricing and higher tooling volumes. Management said survey results decreased due to lower activity in the Americas as certain projects shifted from the fourth quarter into the first quarter of 2026.
SSR’s average ROV revenue per day utilized increased 7% from $10,481 in 2024 to $11,210 in 2025, with a fourth-quarter exit rate of $11,550. These pricing gains offset lower fleet utilization, which fell to 62% during the quarter. The company said 67% of ROV days utilized were for drill support and 33% for vessel services. As of year-end, Oceaneering said it held 60% of the contracted floating rig market, with contracts on 81 of 136 floating rigs under contract, and ended the year with 250 ROV systems after upgrading 16 work-class systems and retiring 16 during 2025.
Manufactured Products posted fourth-quarter revenue of $132 million, down 7% year over year. Operating income increased considerably to $20.4 million, and operating income margin was 15%, which management attributed to conversion of high-margin umbilicals backlog and improved results in non-energy projects. Year-end backlog was $511 million, down 15% versus the prior year, and the segment’s full-year book-to-bill ratio was 0.84, which management said was largely due to order timing. Larson noted Manufactured Products full-year 2025 revenue of $569 million and operating income of $72 million were the highest since 2020.
OPG revenue fell 29% to $131 million in the quarter, and operating income declined to $15 million with an 11% margin. Management again cited the prior-year quarter’s intervention and installation work that did not recur. IMDS revenue declined due to lower activity in Europe and West Africa, and operating income fell by $2 million due to lower revenue and a loss tied to resolution of a commercial dispute.
ADTech delivered the standout growth. Fourth-quarter operating income increased 43%, and operating income margin improved to 11% on a 29% rise in revenue versus the prior year. Larson said the improvement reflected new contracts awarded during the year and the company’s strategy of leveraging offshore expertise to expand defense and government work. Management also said ADTech finished 2025 with two fourth-quarter awards on unexercised options expected to generate meaningful revenue in 2026, and that current backlog supports a multi-year growth foundation extending beyond the traditional five-year planning horizon.
Full-year 2025: fifth straight year of revenue growth and higher free cash flow
For full-year 2025, consolidated revenue increased 5% to $2.8 billion, marking a fifth consecutive year of growth, according to management. Operating income rose to $305 million, up $58 million (24%) from 2024, and adjusted EBITDA increased to $401 million, up $54 million (16%). Cash flow from operations increased $116 million to $319 million, which the company attributed primarily to the timing of fourth-quarter collections. Oceaneering invested $111 million in organic capital expenditures during 2025 and generated free cash flow of $208 million, up from $96.1 million in 2024. At year-end, total liquidity was $904 million, consisting of $689 million in cash and cash equivalents and $215 million available under an undrawn revolving credit facility.
2026 outlook: ADTech as primary growth driver; energy activity expected to improve later in year
Looking ahead, management said ADTech is expected to be the primary growth driver in 2026, supported by backlog and anticipated increased spending in defense and government markets. Larson cited expectations for steady U.S. activity in subsea critical infrastructure protection, unmanned subsea systems, and submarine sustainment, along with international opportunities driven by geopolitical tensions and increased allied spending.
For energy-focused businesses, management said it expects an oversupplied oil market early in 2026 that “gradually tightens” over the year. The company expects offshore activity to be relatively flat in the first half of 2026, increasing in the second half and into 2027. Larson referenced U.S. Energy Information Administration expectations for Brent crude prices averaging in the mid-$50 to low-$60 range in 2026 and Rystad Energy’s forecast for relatively flat deepwater rig demand in 2026. Management also pointed to forecasts for higher deepwater final investment decisions (FIDs) and subsea tree awards, which it described as key leading indicators for longer-term offshore activity.
On consolidated guidance, Oceaneering projected 2026 revenue growth in the low- to mid-single-digit percentage range. Management expects ADTech revenue to improve significantly, with SSR and IMDS growth largely offsetting anticipated declines in OPG and Manufactured Products. The company guided to 2026 EBITDA of $390 million to $440 million, with improvements in all segments except OPG, and positive free cash flow of $100 million to $120 million. Management said the year-over-year free cash flow reduction primarily reflects early receipt of approximately $37 million in customer payments during the fourth quarter of 2025 that had been scheduled for the first quarter of 2026.
Oceaneering forecast 2026 organic capital expenditures of $105 million to $115 million (about 40% growth and 60% maintenance), net interest expense of $21 million to $26 million, and cash tax payments of $95 million to $105 million. The company also expects unallocated expenses to average roughly $50 million per quarter in 2026, citing wage inflation, IT costs, and foreign exchange impacts.
By segment, management’s expectations included:
- SSR: low- to mid-single-digit revenue growth and mid-30% EBITDA margins, supported by tooling volume, improved survey results, and the full-year benefit of 2025 pricing actions. ROV utilization is projected in the mid-60% range, with higher activity in the second and third quarters.
- Manufactured Products: meaningful operating income improvements on slightly lower revenue, driven by umbilicals backlog conversion, higher absorption at umbilical plants, increased rotator order activity, and cost reductions in non-energy product lines, with mid-teens operating margins expected.
- OPG: lower revenue and significantly lower operating income, reflecting a shift toward traditional inspection, maintenance, and repair work from installation and intervention work and lower activity in the U.S. Gulf and West Africa, partially offset by higher activity in Brazil, the Caspian, and the Middle East.
- IMDS: significantly improved operating income on higher revenue, with growth opportunities in digital and engineering services and mid-single-digit operating margins expected.
- ADTech: improved operating income on significantly higher revenue, with growth across all three government-focused businesses and low-teens operating margins expected.
For the first quarter of 2026, Oceaneering said it expects consolidated revenue to decrease and EBITDA of $80 million to $90 million, reflecting lower early-year energy activity. Segment commentary included slightly higher SSR revenue but lower operating income due to geographic mix, significantly higher Manufactured Products operating income on slightly lower revenue, and significantly lower OPG revenue and operating income tied to vessel utilization and project mix. IMDS was expected to be relatively flat, and ADTech was expected to post significantly higher revenue and operating income due to project mix.
During Q&A, Larson said government project timing can vary widely, with some services ramping quickly while development programs move through engineering and prototyping phases. He also described ways the company’s offshore experience supports ADTech, including SUBSAFE-certified submarine sustainment work and space systems offerings. On IMDS and digital initiatives, Larson discussed the use of laser scanning and 3D modeling to detect and quantify corrosion on offshore facilities and said the company has conducted successful tests to apply similar inspection capabilities underwater, potentially increasing demand for ROVs and vessels. On M&A, management said it is not focused on large-scale consolidation but remains interested in bolt-on technology acquisitions like GDI, noting that a stronger balance sheet provides flexibility to pursue opportunities when appropriate.
About Oceaneering International (NYSE:OII)
Oceaneering International, Inc is a global provider of engineered services and products primarily to the offshore oil and gas industry, as well as to aerospace, defense, and commercial diving markets. The company specializes in remotely operated vehicles (ROVs), subsea intervention, and inspection services designed to support exploration, production and maintenance activities in challenging underwater environments. In addition to ROV operations, Oceaneering offers asset integrity solutions, specialized tooling, and intervention equipment for pipelines, risers, and flowlines.
Founded in 1964 and headquartered in Houston, Texas, Oceaneering has grown through both organic expansion and strategic acquisitions.
