Cactus Inc, the Houston-based oil and gas equipment provider, recently concluded its Q1 2024 earnings call. Amidst discussions of margins, rig counts, and Saudi Aramco, CEO Scott Bender's closing remarks held a tantalizing clue: a brief mention of Steve Tadlock's work at Spoolable Technologies and "new applications" for spoolable pipe, receiving inquiries from "several non-oil and gas customers for large international projects." Could this be Cactus's "secret sauce" for global expansion?

While analysts focus on the cyclical U.S. land activity, Cactus might be quietly nurturing a new growth engine with its Spoolable Technologies segment. Spoolable pipe, traditionally used for oil and gas transport, has potential applications in various infrastructure projects:

The possibilities are particularly vast in developing economies with large-scale infrastructure development.

While Cactus doesn't explicitly break down Spoolable Technologies' international revenue, the Q4 2023 earnings call offered a hint: international revenue ranged "from 5% to 10%." This translates to roughly $4.7 million to $9.4 million in Q4 2023.

Although seemingly small, CEO Bender emphasized an "increasing number of orders" and a "strong outlook for larger awards later this year." This suggests significant, potentially exponential, growth for spoolable pipe in non-oil and gas applications.

Let's examine some key figures from the Q1 2024 and Q4 2023 earnings call transcripts:

The chart below illustrates the potential revenue growth of Spoolable Technologies, assuming a conservative annual growth rate of 20% for international projects.

Bender's remark that new applications "reinforce our rationale for this acquisition" suggests Cactus recognized the potential for non-oil and gas applications when acquiring FlexSteel. This strategic foresight could prove highly profitable.

Cactus Inc. has a track record of innovation, market share gains, and disciplined growth. They've consistently outperformed the market in their Spoolable Technologies segment. By leveraging their oil and gas expertise to penetrate new markets, Cactus could create a diversified global revenue stream, insulating them from the energy industry's cyclicality. They could become the leading provider of spoolable pipe solutions in a world eager for infrastructure development.

"Cactus Inc.'s innovative spoolable pipe technology reduces transportation costs and environmental impact compared to traditional rigid pipe. A single reel of spoolable pipe can replace multiple truckloads of rigid pipe, reducing fuel consumption and emissions significantly."