TETRA TECHNOLOGIES INC (TTI)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and accompanying notes included in this Quarterly Report. In addition, the following discussion and analysis should also be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (“SEC”) on February 25, 2026 (“2025 Annual Report”). This discussion includes forward-looking statements that involve certain risks and uncertainties.

Business Overview

We are an energy services and solutions company with operations on six continents focused on developing environmentally conscious services and solutions. Calcium chloride is used in the oil and gas industry, and also has broad industrial applications to the agricultural, road, food and beverage, and lithium production markets. In addition to providing products and services to the oil and gas industry and calcium chloride for diverse applications, TETRA is expanding into the low-carbon energy market with chemistry expertise, key mineral acreage, and global infrastructure, helping to meet the demand for sustainable energy in the twenty-first century. We are also developing and pilot testing technologies to treat and desalinate produced water from oil wells for beneficial reuse, including surface discharge. We are currently composed of two segments – Completion Fluids & Products and Water & Flowback Services.

Consolidated revenue for the first six months of 2026 of $341.9 million increased 3.3% compared to the prior year, led by strong results from our Completion Fluids & Products Segment, and increased 18.8% sequentially quarter over quarter.

Completion Fluids & Products Segment revenues for the second quarter of 2026 increased 23.3% compared to the first quarter of 2026 driven by strong specialty chemicals and deepwater Brazil projects. Completion Fluids & Products Segment revenues increased slightly compared to the first six months of 2025.

Water & Flowback Services revenues increased slightly compared to the first quarter of 2026, driven by additional early production facilities operating during the second quarter of 2026 in Latin America and higher flowback activity as utilization of TETRA Sandstorm and Auto-Drillout technologies continued to improve across the United States. We continue to take proactive actions to reduce costs, optimize the size of our support structure, and close underperforming service lines within Water & Flowback Services.

The Middle East conflict did not materially affect our first or second quarter 2026 results, as historically less than 5% of our revenue is exposed to this region. Our chemical manufacturing plants are located in the United States and Europe and our elemental bromine for our chemical manufacturing in the United States is sourced locally. Over the longer term, the impact of developments in the Persian Gulf and the broader Middle East may impact the global oil and gas markets and our business and financial results. Generally, we believe the conflict may provide tailwinds to an already robust offshore and deepwater outlook and boost unconventional investment activity in the United States and Latin America.

20

Results of Operations

The following information should be read in conjunction with the Consolidated Financial Statements and the associated Notes contained elsewhere in this report. The analysis herein reflects the optional approach to discuss results of operations on a sequential-quarter basis, which we believe provides information that is most useful in assessing our quarterly results of operations.

Three months ended June 30, 2026 compared with three months ended March 31, 2026.

Consolidated Comparisons

Consolidated revenues increased sequentially as a result of increased activity for both the Completion Fluids & Products Segment and Water & Flowback Segment. See Segment Comparisons section below for a more detailed discussion of the change in our revenues.

Consolidated gross profit increased primarily due to higher activity levels from both the Completion Fluids & Products and Water & Flowback Services Segments. See Segment Comparisons section below for additional discussion.

Consolidated other (income) expense, net, decreased compared to the prior quarter primarily due to a $1.1 million decrease in unrealized gains from the change in fair value of our investments issued by a privately-held company and by a $2.2 million decrease in foreign exchange gains, primarily in Brazil and Argentina.

Consolidated income tax expense increased $2.3 million. The increase in our tax expense was related to an increase in earnings as well as an increase in the company’s effective tax rate. The Company's effective tax rate increased to 35.4% for the three months ending June 30, 2026, from 28.2% in the prior quarter. The increase in the effective tax rate resulted primarily from a shift in the mix of earnings toward higher-tax foreign jurisdictions.

Segment Comparisons

Completion Fluids & Products Segment

Revenues for our Completion Fluids & Products Segment increased sequentially primarily due to higher sales volumes in our Northern Europe specialty chemicals business as well as ongoing deepwater Brazil projects.

21

Gross profit and operating income for our Completion Fluids & Products Segment increased compared to the prior quarter driven by the increase in revenues mentioned above. Our profitability in future periods will continue to be affected by the mix of our products and services, market demand for our products and services, and drilling and completions activity.

Water & Flowback Services Segment

Revenues for our Water & Flowback Services Segment increased compared to the prior quarter driven by new early production facilities in Latin America and increased flowback activity from improved utilization of our patented TETRA SandStorm and Auto-Drillout technologies in key markets in the United States and Latin America.

Gross profit and operating income for our Water & Flowback Services Segment increased compared to the prior quarter primarily due to the increased activity levels described above, as well as by cost-reduction initiatives and market penetration of higher-margin automation technologies.

Corporate Overhead

Corporate overhead loss before taxes decreased slightly compared to the prior quarter primarily due to a $0.4 million increase in other income, partially offset by a $0.3 million increase in general and administrative expenses primarily from higher legal fees.

22

Six months ended June 30, 2026 compared with six months ended June 30, 2025.

Consolidated Comparisons

(1) Percent change is not meaningful

Consolidated revenues increased slightly compared to the prior year due to a slight increase in revenues from both our Completion Fluids & Products and Water & Flowback Services Segments. See Segment Comparisons section below for a more detailed discussion of the change in our revenues.

Consolidated gross profit decreased compared to the prior year primarily due to the increase in Cost of product sales from our Completion Fluids & Products Segment. See Segment Comparisons section below for a more detailed discussion of the change in our revenues.

Consolidated general and administrative expenses increased $1.6 million compared to the prior year due to higher compensation expenses, including incentive compensation and legal fees.

Interest expense, net decreased $2.4 million primarily due to an increase in the interest expense capitalized for our Arkansas development as well as lower interest rates on our Term Credit Agreement.

Consolidated other (income) expense, net, changed compared to the prior year in part due to an $8.7 million decrease in foreign exchang

[Excerpt truncated for page length; source filing is linked above.]

Results of Operations

The following data should be read in conjunction with the Consolidated Financial Statements and the associated Notes contained elsewhere in this report.

Consolidated Results of Operations

(1) Percent change is not meaningful

Revenues

Consolidated revenues for 2025 increased compared to the prior year primarily due to higher activity in our Completion Fluids & Products Segment offset by lower activity in our Water & Flowback Services Segment, where revenue increased by $65.2 million and decreased $33.3 million, respectively. The increase in our Completion Fluids & Products Segment is primarily due to the completion of three TETRA Neptune wells in the Gulf of America and higher completion fluid sales volumes from international markets. The decrease in our Water & Flowback Services Segment is primarily from an overall decline in the market for our production testing and water management services in the United States. See Segment Comparisons section below for a more detailed discussion of the change in our revenues.

Impairments and other charges

Consolidated impairments and other charges increased primarily due to a $3.6 million impairment of the right of use asset for our former corporate office lease following our move to our new corporate office space in December 2025.

Gross Profit

Consolidated gross profit as a percentage of revenue increased slightly due to an increase in revenue, an increase in operating costs and the effect of changes in product mix. See Segment Comparisons section below for additional discussion.

32

General and Administrative Expense

Consolidated general and administrative expenses increased during 2025 compared to the prior year primarily due to a $6.8 million increase in equity-based compensation expense and incentive compensation expense as a result of higher shareholder return and operational margin performance and a $3.6 million increase in professional expense.

Interest Expense, Net

Consolidated interest expense, net, decreased $5.1 million during 2025 due to an increase in the interest expense capitalized for our Arkansas development as well as lower interest rates on our Term Credit Agreement.

Loss on Early Extinguishment of Debt

Consolidated loss on debt extinguishment decreased during 2025 as a result of $5.5 million from non-cash unamortized finance costs expensed in connection with the repayment of our prior Term Credit Agreement in January 2024.

Other Expense, net

Consolidated other expense, net, increased during 2025 compared to the prior year other income, net primarily due to a $9.2 million decrease in gains on our investment in Kodiak Gas Services Inc. (NYSE: KGS, “Kodiak”) stock which we sold in January 2025, a $6.5 million increase in other expenses, which included the non-cash accrual of $5.9 million of operating expenses related to our former corporate office lease through the contractual lease end date in 2027 and a $4.5 million increase in foreign exchange losses. These increases were partially offset by a $2.9 million increase in unrealized gains on our investment in Standard Lithium stock due to changes in their stock price.

Provision for Income Tax

Consolidated income tax expense increased $107.2 million primarily due to the reversal of the valuation allowance during the prior year related to our United States deferred tax assets (federal and state). We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. As of December 31, 2024, in part because in the current year we achieved three years of cumulative pretax income in the United States tax jurisdiction, management determined that there was sufficient positive evidence to conclude that it is more likely than not that additional deferred taxes of $97.5 million are realizable. We therefore reduced the valuation allowance accordingly.

Our consolidated effective tax rate for the year ended December 31, 2025 and 2024 was 84.1% and (295.3)%, respectively. The change in our effective tax rate was primarily the result of the reversal of the valuation allowance in the prior year. In addition, we elected to change the United States tax classification of our Brazilian subsidiary from a partnership to a corporation. While this tax election is expected to yield future tax benefits, the tax election resulted in recognition of approximately $6.9 million of federal deferred tax expense in the current year. Our current-year effective tax rate also increased because we did not recognize a tax benefit on the $9.5 million cumulative translation adjustment loss related to the dissolution of our Canadian subsidiary as the loss was recognized for tax purposes in a prior year when the loss was not expected to be recognized under generally accepted accounting principles. See Note 2 - “Basis of Presentation and Significant Accounting Policies” and Note 15 - “Income Taxes” in the Notes to Consolidated Financial Statements for further information on our income taxes.

33

Completion Fluids & Products Segment

The Completion Fluids & Products Segment revenues increased primarily due to the successful completion of three TETRA Neptune wells in the Gulf of America, higher international brominated product sales, particularly in Europe, and higher completion fluid sales in Latin America.

The Completion Fluids & Products Segment gross profit during 2025 increased compared to the prior year due to the increase in revenues mentioned above, particularly the higher-margin Neptune fluids. Completion Fluids & Products Segment profitability in future periods will continue to be affected by the mix of its products and services, market demand for our products and services, drilling and completions activity and commodity prices.

The Completion Fluids & Products Segment operating income increased during 2025 compared to the prior year primarily due to the increase in gross profit, partially offset by a slight increase in general and administrative expenses primarily related to a $0.9 million increase in insurance cost and a $0.9 million increase in professional services.

Water & Flowback Services Segment

The Water & Flowback Services Segment revenues decreased during 2025 compared to the prior year primarily due to an overall decline in the United States market from both our production testing and water management services. These declines were partially offset by increased flowback activity from improving TETRA SandStorm and auto-drillout utilization in key markets in the United States.

The Water & Flowback Services Segment gross profit decreased due to lower revenues resulting from the decreased activity levels described above and operating cost inflation.

The Water & Flowback Services Segment operating income decreased during 2025 compared to the prior year primarily due to the decrease in gross profit and an increase in general and administrative expense primarily related to a $1.5 million increase in labor and benefits expense and a $0.5 million increase in professional services.

34

Corporate Overhead

(1) Percent change is not meaningful

Corporate Overhead loss from continuing operations before income taxes increased during 2025 compared to the prior year primarily due to a $6.6 million increase in general and administrative expense from higher equity-based compensation expense, incentive compensation expense and professional fees; the non-cash accrual of $5.9 million of operating expenses related to our former corporate office lease through the expiration in 2027 and the $3.6 million impairment of the right of use asset for our former corporate office lease. These expense increases were partially offset by a $5.1 million decrease in interest expense, net, due to an increase in the interest expense capitalized for our Arkansas project as well as lower interest rates on our Term Credit Agreement, a $9.2 million decrease in gains on our investment in Kodiak stock which we sold in January 2025, and the $5.5 million loss on debt extinguishmen

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]