What Cactus, Inc. told the SEC could break it.

Cactus is acutely tariff-exposed: it is a steel-intensive manufacturer that sources raw materials and finished products from China, India, Australia and Vietnam and runs a primary manufacturing plant in Suzhou, China. In 2025 the new Section 232 tariffs of 50% on imported steel and steel products, plus 'Synthetic Opioid' tariffs on all imports from China, drove a realized hit to earnings — Pressure Control operating income fell $20.8 million, or 9.9%, to $189.9 million, a decline the company attributes primarily to escalated tariff cost impacts on product margins (alongside higher legal expenses). Management warns tariffs will likely result in higher operating expenses and potentially lower demand for its products.

“Over the course of 2025, the Trump administration has implemented and announced a number of new tariffs, including new Section 232 tariffs of 50% on imports of steel and certain products made from steel from most countries outside of the U.S., and Synthetic Opioid tariffs on all imports from China.”

Cactus's products are steel-intensive: the principal raw materials for its Pressure Control products and rental equipment are forgings, tube and bar stock, and for its Spoolable Technologies (FlexSteel) products tube, bar stock, steel strip and high-density polyethylene. Steel price increases or supply tightness directly pressure manufacturing costs and margins, and this commodity dependence is what makes the 2025 Section 232 steel tariffs so impactful to its results.

“The principal raw materials used for our spoolable products include tube, bar stock, steel strip and high-density polyethylene.”

Although Cactus serves over 300 customers, revenue is increasingly concentrated in one account: a single (unnamed) customer represented 17% of total Company revenues in 2025, up from 15% in 2024 and 10% in 2023, with that customer buying from both operating segments. Loss of, or reduced spending by, that customer would have a disproportionate impact on revenues.

“For the years ended December 31, 2025, 2024, and 2023 one customer represented 17%, 15% and 10%, respectively, of total Company revenues, with both operating segments reporting revenues with the customer.”

Because a primary Cactus manufacturing plant is in Suzhou, China (with a new plant starting in Vietnam) and it sources materials from China, India, Australia and Vietnam, its inbound supply chain depends on ocean transit through key chokepoints. The company flags that transit times through and availability of the Panama Canal may be impacted by weather patterns and political tensions among the U.S., Panama and China, and that port-labor-related disruptions could increase transit times and costs — any of which could delay product flow and raise landed costs.

“Transit times through and availability of the Panama Canal may be impacted by weather patterns and political tensions among the US, Panama and China.”