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Cactus (WHD) Risk Analysis
Risk Overview Q2, 2026
Source: the company's latest filing for the period ended Jun 30, 2026, filed Jul 30, 2026
Risk Change Over Time
- Economy & Political Environment - Risk 1Ongoing conflict between the United States, Iran and other countries in the Middle East could continue to adversely impact our operations in the Middle East.
Cactus International, a 65% owned subsidiary of the Company, has plants in the UAE and Saudi Arabia. Both Cactus Wellhead and Cactus International, as well as our Spoolable Technologies segment, maintain significant operations in the Middle East. As long as the conflict between or among the United States, Iran and other countries in the Middle East continues, (i) those plants and operations are subject to interruptions, (ii) customer operations may be disrupted resulting in fewer orders, (iii) traffic through the Strait of Hormuz will likely negatively impact our supply chain in the region, (iv) there may be increased safety concerns for our employees and (v) our integration plan for Cactus International may be delayed. There is no way to predict when this conflict will be resolved and when operations can be restored to the conditions that existed before the conflict began. Until such conditions are restored, we expect that our operations in the Middle East and our financial results will be adversely impacted.
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 39
- Regulation - Risk 1Delays in obtaining, or inability to obtain or renew, permits or authorizations by our customers for their operations could impair our business.
Our customers are required to obtain permits or authorizations from one or more governmental agencies or other third parties to perform drilling and completion activities, including hydraulic fracturing. Such permits or approvals are typically required by state agencies but can also be required by federal and local governmental agencies or other third parties. As with most permitting and authorization processes, there is a degree of uncertainty as to whether a permit will be granted, the time it will take for a permit or approval to be issued and the conditions which may be imposed in connection with the granting of the permit. In some jurisdictions, certain regulatory authorities have delayed or suspended the issuance of permits or authorizations while the potential environmental impacts associated with issuing such permits can be studied and appropriate mitigation measures evaluated. In Texas, rural water districts have begun to impose restrictions on water use and may require permits for water used in drilling and completion activities. Oil and gas leasing on public land remains politically fraught and federal land available for oil and gas leasing could be significantly reduced due to environmental and climate concerns. The effects of these developments or other initiatives to reform the federal leasing process could result in additional restrictions or limitations on the issuance of federal leases and permits for drilling on public lands. Permitting, authorization or renewal delays, the inability to obtain new permits or the revocation of current permits could impact our customers' operations and cause a loss of revenue and potentially have a material adverse effect on our business, results of operations and cash flows.
- Regulation - Risk 2Political, regulatory, economic and social disruptions in the countries in which we conduct business and globally could adversely affect our business or results of operations.
In addition to our facilities in the United States, we operate a production facilities in China and, Vietnam, and we have facilities in Australia and Canada that sell and rent equipment as well as provide parts, repair services and field services associated with installation. Additionally, we provide rental and field service operations in the Middle East. Instability and unforeseen changes in any of the markets in which we conduct business could have an adverse effect on the demand for, or supply of, our business, results of operations and cash flows. We have also expanded our operations and footprint in the Middle East as a result of the Baker Hughes Transaction.
- Regulation - Risk 3Our operations require us to comply with various domestic and international regulations, violations of which could have a material adverse effect on our results of operations, financial condition and cash flows.
We are exposed to a variety of federal, state, local and international laws and regulations relating to matters such as environmental, workplace, health and safety, labor and employment, customs and tariffs, export and re-export controls, economic sanctions, currency exchange, bribery and corruption and taxation. These laws and regulations are complex, frequently change and have tended to become more stringent over time. They may be adopted, enacted, amended, enforced or interpreted in such a manner that the incremental cost of compliance could adversely impact our business, results of operations and cash flows. In addition to our U.S. operations, we have operations in, among other countries, China, Australia, Canada, Vietnam and the Middle East. Our operations outside of the United States require us to comply with numerous anti-bribery and anti-corruption regulations. The U.S. Foreign Corrupt Practices Act, among others, applies to us and our operations. Our policies, procedures and programs may not always protect us from reckless or criminal acts committed by our associates or agents, and severe criminal or civil sanctions may be imposed as a result of violations of these laws. We are also subject to the risks that our associates and agents outside of the United States may fail to comply with applicable laws. In addition, we import raw materials, semi-finished goods, and finished products into, among other countries, the United States, China, Australia, Canada, Vietnam, India and the Middle East for use in such countries or for manufacturing and/or finishing for re-export and import into another country for use or further integration into equipment or systems. Most movement of raw materials, semi-finished or finished products involves imports and exports. As a result, compliance with multiple trade sanctions, embargoes and import/export laws and regulations pose an ongoing challenge and risk to us since a portion of our business is conducted outside of the United States through our subsidiaries. Our failure to comply with these laws and regulations could materially affect our business, results of operations and cash flows.
- Regulation - Risk 4Oilfield anti-indemnity provisions enacted by many states may restrict or prohibit a party's indemnification of us.
We typically enter into agreements with our customers governing the provision of our services, which usually include certain indemnification provisions for losses resulting from operations. Such agreements may require each party to indemnify the other against certain claims regardless of the negligence or other fault of the indemnified party; however, many states place limitations on contractual indemnity agreements, particularly agreements that indemnify a party against the consequences of its own negligence. Furthermore, certain states, including Louisiana, New Mexico, Texas, and Wyoming, have enacted statutes generally referred to as "oilfield anti-indemnity acts" expressly prohibiting certain indemnity agreements contained in or related to oilfield services agreements. Such oilfield anti-indemnity acts may restrict or void a party's indemnification of us, which could have a material adverse effect on our business, results of operations and cash flows.
- Regulation - Risk 5Our customers require us to be licensed or approved by industry groups such as the American Petroleum Institute ("API") and the International Organization for Standardization ("ISO"). The failure to obtain and maintain such licenses and/or approvals could have a material adverse effect on our results of operations, financial condition and cash flows.
We currently hold licenses from API and ISO that are required by our customers. Maintaining those licenses are subject to continually meeting the standards required for those licenses, including periodic audit by the applicable organization. If we are not able to continue to hold such licenses and/or approvals, we could potentially no longer be able to provide goods and services to many of our customers.
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