Cactus (WHD) 10-Q 31 Oct 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Oct. 30, 2019
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Entity Registrant Name	Cactus, Inc.
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Central Index Key	0001699136
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Class A Common Stock
Entity Common Stock, Shares Outstanding		47,101,875
Class B Common Stock
Entity Common Stock, Shares Outstanding		28,014,923

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 167,545	$ 70,841
Accounts receivable, net of allowance of $774 and $576	100,305	92,269
Inventories	111,590	99,837
Prepaid expenses and other current assets	7,510	11,558
Total current assets	386,950	274,505
Property and equipment, net	157,124	142,054
Operating lease right-of-use assets, net	26,537
Goodwill	7,824	7,824
Deferred tax asset, net	231,224	159,053
Other noncurrent assets	1,478	1,308
Total assets	811,137	584,744
Current liabilities
Accounts payable	40,959	42,047
Accrued expenses and other current liabilities	19,706	15,650
Current portion of liability related to tax receivable agreement	14,815	9,574
Finance lease obligations, current portion	7,361	7,353
Operating lease liabilities, current portion	6,739
Total current liabilities	89,580	74,624
Deferred tax liability, net	822	1,036
Liability related to tax receivable agreement, net of current portion	206,105	138,015
Finance lease obligations, net of current portion	5,339	8,741
Operating lease liabilities, net of current portion	20,232
Total liabilities	322,078	222,416
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 par value, 10,000 shares authorized, none issued and outstanding
Additional paid-in capital	193,409	126,418
Retained earnings	119,237	51,683
Accumulated other comprehensive loss	(792)	(820)
Total stockholders' equity attributable to Cactus Inc.	312,325	177,658
Non-controlling interest	176,734	184,670
Total stockholders' equity	489,059	362,328
Total liabilities and equity	811,137	584,744
Class A Common Stock
Stockholders' equity
Common stock, $0.01 par value	471	377
Class B Common Stock
Stockholders' equity
Common stock, $0.01 par value

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Allowance for doubtful accounts receivable	$ 774	$ 576
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000	10,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Class A Common Stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	300,000	300,000
Common stock, shares issued	47,100	37,654
Common stock, shares outstanding	47,100	37,654
Class B Common Stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	215,000	215,000
Common stock, shares issued	28,015	37,236
Common stock, shares outstanding	28,015	37,236

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenues
Total revenues	$ 160,808	$ 150,658	$ 488,176	$ 404,311
Costs and expenses
Selling, general and administrative expenses	13,348	11,051	39,268	30,016
Total costs and expenses	113,685	98,525	341,111	270,474
Income from operations	47,123	52,133	147,065	133,837
Interest income (expense), net	373	(270)	489	(3,370)
Other income (expense), net	558		(484)	(4,305)
Income before income taxes	48,054	51,863	147,070	126,162
Income tax expense	12,221	8,215	22,041	14,564
Net income	35,833	43,648	125,029	111,598
Net income				111,598
Less: pre-IPO net income attributable to Cactus LLC				13,648
Less: net income attributable to non-controlling interest	16,494	24,976	57,475	63,191
Net income attributable to Cactus Inc.	19,339	18,672	67,554
Net income attributable to Cactus Inc.				34,759
Product revenue
Revenues
Total revenues	92,582	79,388	273,716	211,595
Costs and expenses
Cost of revenue	57,768	46,816	168,303	128,897
Rental revenue
Revenues
Total revenues	35,528	38,135	113,601	102,224
Costs and expenses
Cost of revenue	17,194	15,349	54,435	41,477
Field service and other revenue
Revenues
Total revenues	32,698	33,135	100,859	90,492
Costs and expenses
Cost of revenue	$ 25,375	$ 25,309	$ 79,105	$ 70,084
Class A Common Stock
Costs and expenses
Earnings per Class A Share - basic	$ 0.41	$ 0.52	$ 1.53	$ 1.15
Earnings per Class A Share - diluted	$ 0.41	$ 0.52	$ 1.50	$ 1.14
Weighted average Class A Shares outstanding - basic	47,095	35,821	44,260	30,182
Weighted average Class A Shares outstanding - diluted	47,322	36,229	75,337	30,522

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 35,833	$ 43,648	$ 125,029	$ 111,598
Net income				111,598
Foreign currency translation	(469)	(519)	(570)	(870)
Comprehensive income	35,364	43,129	124,459
Comprehensive income				110,728
Less: pre-IPO comprehensive income attributable to Cactus LLC				13,928
Less: comprehensive income attributable to non-controlling interest	16,494	24,679	57,475	62,453
Comprehensive income attributable to Cactus Inc.	$ 18,870	$ 18,450	$ 66,984
Comprehensive income attributable to Cactus Inc.				$ 34,347

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands	Class A Common StockCommon stock	Class A Common Stock	Class B Common StockCommon stock	Members' Equity (Deficit)	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non-controlling Interest	Total
Balance at the beginning of the period at Dec. 31, 2017				$ (36,299)			$ 82		$ (36,217)
Statement of Stockholders'/Members' Equity
Member distributions prior to IPO				(26,000)					(26,000)
Net income prior to IPO				13,648					13,648
Effect of IPO and Reorganization	$ 265			$ 48,651	$ 71,196			$ 130,861	250,973
Effect of IPO and Reorganization (shares)	26,450		48,440
Member distribution after IPO								(5,848)	(5,848)
Effect of Follow-on Offering	$ 112				24,472			(25,293)	(709)
Effect of Follow-on Offering (in shares)	11,197		(11,197)
Additional paid-in capital related to tax receivable agreement					28,552				28,552
Other comprehensive loss							(870)		(870)
Stock-based compensation					3,384				3,384
Net income						$ 34,759		63,191	97,950
Balance at the end of the period at Sep. 30, 2018	$ 377				127,604	34,759	(788)	162,911	324,863
Balance at the end of the period (shares) at Sep. 30, 2018	37,647		37,243
Balance at the beginning of the period at Jun. 30, 2018	$ 265				84,409	16,087	(269)	164,801	265,293
Balance at the beginning of the period (shares) at Jun. 30, 2018	26,450		48,440
Statement of Stockholders'/Members' Equity
Member distribution after IPO								(1,573)	(1,573)
Effect of Follow-on Offering	$ 112				24,472			(25,293)	(709)
Effect of Follow-on Offering (in shares)	11,197		(11,197)
Additional paid-in capital related to tax receivable agreement					17,436				17,436
Other comprehensive loss							(519)		(519)
Stock-based compensation					1,287				1,287
Net income						18,672		24,976	43,648
Balance at the end of the period at Sep. 30, 2018	$ 377				127,604	34,759	(788)	162,911	324,863
Balance at the end of the period (shares) at Sep. 30, 2018	37,647		37,243
Balance at the beginning of the period at Dec. 31, 2018	$ 377				126,418	51,683	(820)	184,670	362,328
Balance at the beginning of the period (shares) at Dec. 31, 2018	37,654		37,236
Statement of Stockholders'/Members' Equity
Correction to equity reclassification related to prior equity offering					14,035		488	(14,523)
Adjustments to prior periods					(1,466)			960	(506)
Member distribution after IPO								(5,853)	(5,853)
Effect of CW Unit redemptions	$ 92				48,344		(57)	(48,379)
Effect of CW Unit redemptions (in shares)	9,221		(9,221)
Effect of Follow-on Offering (in shares)		700
Adjustment to deferred tax asset from CW Unit redemptions					(9,751)				(9,751)
Additional paid-in capital related to tax receivable agreement					14,652				14,652
Other comprehensive loss							(403)	(167)	(570)
Equity award vestings	$ 2				(4,080)			2,551	(1,527)
Equity award vestings (in shares)	225
Stock-based compensation					5,257				5,257
Net income						67,554		57,475	125,029
Balance at the end of the period at Sep. 30, 2019	$ 471				193,409	119,237	(792)	176,734	489,059
Balance at the end of the period (shares) at Sep. 30, 2019	47,100		28,015
Balance at the beginning of the period at Jun. 30, 2019	$ 471				193,160	99,898	(498)	161,499	454,530
Balance at the beginning of the period (shares) at Jun. 30, 2019	47,093		28,020
Statement of Stockholders'/Members' Equity
Adjustments to prior periods					(1,466)			960	(506)
Member distribution after IPO								(2,005)	(2,005)
Effect of CW Unit redemptions					39			(39)
Effect of CW Unit redemptions (in shares)	5		(5)
Other comprehensive loss							(294)	(175)	(469)
Equity award vestings					(13)				(13)
Equity award vestings (in shares)	2
Stock-based compensation					1,689				1,689
Net income						19,339		16,494	35,833
Balance at the end of the period at Sep. 30, 2019	$ 471				$ 193,409	$ 119,237	$ (792)	$ 176,734	$ 489,059
Balance at the end of the period (shares) at Sep. 30, 2019	47,100		28,015

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities
Net income	$ 125,029	$ 111,598
Reconciliation of net income to net cash provided by operating activities
Depreciation and amortization	28,264	21,829
Debt discount and deferred loan cost amortization	126	229
Stock-based compensation	5,257	3,384
Provision for bad debts	255
Inventory obsolescence	1,708	932
Loss on disposal of assets	820	1,759
Deferred income taxes	15,072	11,762
Loss on debt extinguishment		4,305
Gain from revaluation of liability related to tax receivable agreement	(558)
Changes in operating assets and liabilities:
Accounts receivable	(8,326)	(21,761)
Inventories	(14,513)	(22,866)
Prepaid expenses and other assets	4,032	(3,835)
Accounts payable	(4,334)	8,108
Accrued expenses and other liabilities	4,694	6,906
Payments pursuant to tax receivable agreement	(9,335)
Net cash provided by operating activities	148,191	122,350
Cash flows from investing activities
Capital expenditures and other	(40,526)	(55,720)
Proceeds from sale of assets	2,811	1,313
Net cash used in investing activities	(37,715)	(54,407)
Cash flows from financing activities
Principal payments on long-term debt		(248,529)
Payment of deferred financing costs		(576)
Payments on finance leases	(5,660)
Payments on finance leases		(4,456)
Net proceeds from equity offerings		828,168
Distributions to members	(5,853)	(31,848)
Redemption of CW Units		(575,681)
Repurchase of shares	(1,529)
Net cash used in financing activities	(13,042)	(32,922)
Effect of exchange rate changes on cash and cash equivalents	(730)	(614)
Net increase in cash and cash equivalents	96,704	34,407
Cash and cash equivalents
Beginning of period	70,841	7,574
End of period	$ 167,545	$ 41,981

Organization and Nature of Oper

Organization and Nature of Operations	9 Months Ended
	Sep. 30, 2019
Organization and Nature of Operations
Organization and Nature of Operations	1. Organization and Nature of Operations Description of Business Cactus, Inc. (“Cactus Inc.”) and its consolidated subsidiaries (“the Company”), including Cactus Wellhead, LLC (“Cactus LLC”), are primarily engaged in the design, manufacture and sale of wellhead and pressure control equipment. In addition, we maintain a fleet of frac valves and ancillary equipment for short-term rental, as well as offer repair and refurbishment services and the provision of service crews to assist in the installation and operations of pressure control systems. We operate through U.S. service centers located in Texas, Pennsylvania, Oklahoma, North Dakota, New Mexico, Louisiana, Colorado and Wyoming, and in Eastern Australia, with our corporate headquarters located in Houston, Texas. We also have manufacturing and production facilities in Bossier City, Louisiana and Suzhou, China. Cactus Inc. was incorporated on February 17, 2017 as a Delaware corporation for the purpose of completing an initial public offering of equity and related transactions, which was completed on February 12, 2018 (our “IPO”). Cactus Inc. is a holding company whose only material asset is an equity interest consisting of units representing limited liability company interests in Cactus LLC (“CW Units”). Cactus Inc. became the sole managing member of Cactus LLC upon completion of our IPO. Cactus LLC is a Delaware limited liability company and was formed on July 11, 2011. Except as otherwise indicated or required by the context, all references to “Cactus,” “we,” “us” and “our” refer to Cactus Inc. and its consolidated subsidiaries (including Cactus LLC) following the completion of our IPO and Cactus LLC and its consolidated subsidiaries prior to the completion of our IPO. As the sole managing member of Cactus LLC, Cactus Inc. operates and controls all of the business and affairs of Cactus LLC and conducts its business through Cactus LLC and its subsidiaries. As a result, Cactus Inc. consolidates the financial results of Cactus LLC and its subsidiaries and reports non-controlling interest related to the portion of CW Units not owned by Cactus Inc., which reduces net income attributable to holders of Cactus Inc.’s Class A common stock, par value $0.01 per share (“Class A common stock”). Redemptions and Ownership Redemptions of CW Units Pursuant to the First Amended and Restated Limited Liability Company Operating Agreement of Cactus LLC (the “Cactus LLC Agreement”), each holder of CW Units (“CW Unit Holder”) has, subject to certain limitations, the right (the “Redemption Right”) to cause Cactus LLC to acquire all or at least a minimum portion of its CW Units for, at Cactus LLC’s election, (x) shares of our Class A common stock at a redemption ratio of one share of Class A common stock for each CW Unit redeemed, subject to conversion rate adjustments for stock splits, stock dividends and reclassification and other similar transactions, or (y) an equivalent amount of cash. Alternatively, upon the exercise of the Redemption Right, Cactus Inc. (instead of Cactus LLC) will have the right (the “Call Right”) to acquire each tendered CW Unit directly from the exchanging CW Unit Holder for, at its election, (x) one share of Class A common stock, subject to conversion rate adjustments for stock splits, stock dividends and reclassifications and other similar transactions, or (y) an equivalent amount of cash. In connection with any redemption of CW Units pursuant to the Redemption Right or our Call Right, the corresponding number of shares of Class B common stock, par value $0.01 per share (“Class B common stock”), will be canceled. The following is a rollforward of ownership of legacy CW Units by legacy CW Unit Holders, reflecting redemptions of CW Units occurring since our IPO: CW Units CW Units held by legacy CW Unit Holders as of February 7, 2018 60,558 IPO (12,118) July 2018 follow-on offering (11,197) Other CW Unit redemptions (7) CW Units held by legacy CW Unit Holders as of December 31, 2018 37,236 March 2019 Secondary Offering (8,474) Other CW Unit redemptions (747) CW Units held by legacy CW Unit Holders as of September 30, 2019 28,015 On March 19, 2019, Cactus Inc. entered into an underwriting agreement by and among Cactus Inc., Cactus LLC, certain selling stockholders of Cactus (the “Selling Stockholders”) and the underwriters named therein, providing for the offer and sale of Class A common stock by the Selling Stockholders (the “March 2019 Secondary Offering”). As described in the prospectus supplement dated March 19, 2019 and filed with the Securities and Exchange Commission on March 20, 2019, in connection with the March 2019 Secondary Offering, certain Selling Stockholders owning CW Units exercised their Redemption Right with respect to 8.5 million CW Units, together with a corresponding number of shares of Class B common stock, as provided in the Cactus LLC Agreement. The March 2019 Secondary Offering closed on March 21, 2019, at which time, in exercise of its Call Right, Cactus Inc. acquired the redeemed CW Units and a corresponding number of shares of Class B common stock (which shares of Class B common stock were then canceled) and issued 8.5 million shares of Class A common stock to the underwriters at the direction of the redeeming Selling Stockholders, as provided in the Cactus LLC Agreement. In addition, certain other Selling Stockholders sold 26 thousand shares of Class A common stock in the March 2019 Secondary Offering, which shares were owned by them directly prior to the closing of this offering. Cactus did not receive any of the proceeds from the sale of common stock in the March 2019 Secondary Offering. Cactus incurred $1.0 million in offering expenses which were recorded in other income (expense), net, in the consolidated statement of income during the first quarter of 2019. In addition to the redemptions associated with the March 2019 Secondary Offering, certain legacy CW Unit Holders redeemed 0.7 million CW Units (together with a corresponding number of shares of Class B common stock) pursuant to the Redemption Right, during the nine months ended September 30, 2019. Cactus acquired the redeemed CW Units and a corresponding number of shares of Class B common stock (which shares of Class B common stock were then canceled) and issued 0.7 million shares of Class A common stock to the redeeming CW Unit Holders. Any exercise by Cactus LLC or Cactus Inc. of the right to acquire redeemed CW Units for cash must be approved by the board of directors of Cactus Inc. To date, neither Cactus Inc. nor Cactus LLC have elected to acquire CW Units for cash in connection with exchanges by CW Unit Holders. It is the policy of Cactus Inc. that any exercise by Cactus Inc. or Cactus LLC of the right to acquire redeemed CW Units for cash must be approved by a majority of those members of the board of directors of Cactus Inc. who have no interest in such transaction. Pursuant to the tax receivable agreement (the “TRA”) described in Note 8, the CW Units redeemed in the March 2019 Secondary Offering and other CW Unit redemptions during the nine months ended September 30, 2019, created additional TRA liability and follow the same accounting procedures described in Note 8. Also, as a result, Cactus Inc. increased its ownership in Cactus LLC and accordingly, increased its equity by $48.4 million from the non-controlling interest. During the quarter ended March 31, 2019, we corrected for misstatements of equity between Cactus Inc. and non-controlling interest related to our July 2018 follow-on offering by reducing non-controlling interest by $14.5 million and increasing additional paid-in capital by $14.0 million and accumulated other comprehensive income by $0.5 million. This related to immaterial errors associated with the ownership percentage change used in the underlying calculation giving effect to the offering. This correction had no impact on total assets, total liabilities, total equity or on our consolidated results of operations or cash flows. These corrections were not material to any prior period consolidated financial statements. During the quarter ended September 30, 2019, we finalized the majority of the Company’s tax returns and identified several adjustments. The most notable adjustment was a $1.0 million reclassification from Cactus Inc. additional paid-in-capital to non-controlling interest. These adjustments were not material to any prior period consolidated financial statements. Ownership As of September 30, 2019, Cactus Inc. owned 62.7% of Cactus LLC, and as of December 31, 2018, Cactus Inc. owned 50.3% of Cactus LLC. As of September 30, 2019, Cactus Inc. had outstanding 47.1 million shares of Class A common stock (representing 62.7% of the total voting power) and 28.0 million shares of Class B common stock (representing 37.3% of the total voting power). Tax Receivable Agreement (TRA) In connection with our IPO, we entered into the TRA with certain direct and indirect owners of Cactus LLC (the “TRA Holders”). The TRA generally provides for payment by Cactus Inc. to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income tax or franchise tax that Cactus Inc. actually realizes or is deemed to realize in certain circumstances. Cactus Inc. will retain the benefit of the remaining 15% of these net cash savings. See Note 8 for further details of the TRA.

Preparation of Interim Financia

Preparation of Interim Financial Statements and Other Items	9 Months Ended
	Sep. 30, 2019
Accounting Policies [Abstract]
Preparation of Interim Financial Statements and Other Items	2. Preparation of Interim Financial Statements and Other Items Basis of Presentation The unaudited condensed consolidated financial statements (“consolidated financial statements” or “consolidated balance sheets” or “consolidated statements of income”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These consolidated financial statements include the accounts of Cactus Inc. and its wholly owned subsidiaries. Accordingly, these consolidated financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read together with our Annual Report on Form 10‑K for the year ended December 31, 2018. All significant intercompany transactions and balances have been eliminated upon consolidation. The consolidated financial statements include all adjustments, which are of a normal recurring nature, unless otherwise disclosed, necessary for a fair statement of the consolidated financial statements for the interim periods. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. As discussed in Note 1, as a result of our IPO and related equity transactions (the “Reorganization”), Cactus Inc. is the sole managing member of Cactus LLC and consolidates the financial results of Cactus LLC and its subsidiaries and reports a non-controlling interest related to the portion of CW Units not owned by Cactus Inc., which reduces net income attributable to holders of Class A common stock. The Reorganization was considered a transaction between entities under common control. As a result, the financial statements for periods prior to our IPO and the Reorganization have been adjusted to combine the previously separate entities for presentation purposes. Our operations are organized into a single reporting segment. Limitation of Members’ Liability Under the terms of the Cactus LLC Agreement, the members of Cactus LLC are not obligated for debt, liabilities, contracts or other obligations of Cactus LLC. Profits and losses are allocated to members as defined in the Cactus LLC Agreement. Interim Period Tax Allocation For interim income tax reporting we estimate our annual effective tax rate and apply it to our year-to-date ordinary income. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur. Net income attributable to Cactus Inc. includes Cactus Inc.’s U.S. federal and state income tax expense. Net income attributable to non-controlling interest is not subject to U.S. federal and state income tax. Significant Customers For the nine months ended September 30, 2019 and 2018, one customer represented 10% and 11%, respectively, of consolidated revenues, and no other customers represented 10% or more of our consolidated revenues during the comparative periods. Significant Vendors We purchase a significant portion of supplies, equipment and machined components from a single vendor. For the nine months ended September 30, 2019 and 2018, purchases from this vendor totaled $30.3 million and $36.4 million, respectively. These figures represent approximately 17% and 22% for the respective periods of our total third-party vendor purchases of raw materials, finished products, equipment, machining and other services. Amounts due to the vendor included in accounts payable in the consolidated balance sheets as of September 30, 2019 and December 31, 2018 totaled $5.4 million and $5.0 million, respectively. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include but are not limited to estimated losses on accounts receivable, estimated realizable value of excess and obsolete inventory, assessments of long-lived assets for possible impairment and estimates of deferred tax assets related to the step-up in basis under the TRA and the associated liability under the TRA. Actual results could differ from those estimates. Recent Accounting Pronouncements Standards Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which amends the FASB Accounting Standards Codification (“ASC”) and creates Topic 842, Leases. On January 1, 2019, we adopted ASC Topic 842, which is effective for interim and annual reporting periods beginning on or after December 15, 2018. This Topic requires balance sheet recognition of lease assets and lease liabilities for leases classified as operating leases under previous GAAP. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. To adopt Topic 842, we elected the modified retrospective approach and as of January 1, 2019, there was no cumulative-effect adjustment required to the opening balance of retained earnings. We completed a review of contracts representative of our business and assessed the terms under the new standard. Adoption of the standard resulted in the recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases on our consolidated balance sheets but did not have a material impact on our consolidated statements of income and consolidated statements of comprehensive income or consolidated statements of cash flows. Our accounting for finance leases remained substantially unchanged. Adoption of this standard resulted in the recognition of operating lease ROU assets of $25.3 million, reversal of previously recorded deferred rent of $0.5 million, and corresponding operating short-term and long-term lease liabilities of $6.2 million and $19.6 million, respectively, on the consolidated balance sheet as of January 1, 2019. See Note 7 for further details regarding leases. In addition, we utilized the package of practical expedients permitted under the transition guidance within the standard. The expedient package allowed us to not reassess whether existing contracts contained a lease, to not reassess the lease classification of existing leases, and to not consider the initial direct cost for existing leases. In addition to the package of practical expedients, we also utilized expedients and elections allowing for the exclusion of leases with terms of less than twelve months across all asset classes, the portfolio approach to determine discount rates, the election to not separate non-lease components from lease components and to not apply the use of hindsight to the existing lease population. As a lessor, recognition of lease revenue associated with short-term equipment rentals remained consistent with previous guidance and the adoption of this standard did not have a significant impact on our consolidated statements of income. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this update allow a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this update also require certain disclosures about stranded tax effects. The amendments in this update are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. We adopted this ASU on January 1, 2019. The adoption of this pronouncement did not have an impact on our consolidated financial statements. Standards Not Yet Adopted In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350), which simplifies the accounting for goodwill impairment by eliminating Step 2 of the current goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the new standard, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance should be adopted for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. We do not expect the adoption of this pronouncement will have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 changes the measurement of credit losses on financial assets measured at amortized cost, including but not limited to trade receivables. The new guidance replaces the current methodology for recognizing credit losses when it is probable that a loss has been incurred (incurred loss model) with an expected loss model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of an asset. Application of this new guidance may result in an earlier recognition of credit losses as the allowance for credit losses is measured and recorded upon the initial recognition of the financial asset. The allowance for credit losses under the new guidance represents the portion of the asset’s amortized cost basis that we do not expect to collect over the asset’s contractual life, considering past events, current conditions and reasonable and supportable forecasts of future economic conditions. The new standard is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, with a modified-retrospective approach to be used for implementation. Our historical credit losses have been insignificant due to our proven ability to collect on our trade receivables. Therefore, we believe that our expected future credit losses will not be significant and do not believe that the adoption of ASU 2016-13 will have a material impact on our consolidated financial statements. We are in the process of finalizing our methodology for estimating expected credit losses, including the assumptions used in order to pool receivables with similar risk characteristics.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2019
Inventories
Inventories	3. Inventories Inventories consist of the following: September 30, December 31, 2019 2018 Raw materials $ 1,642 $ 1,925 Work-in-progress 6,078 3,582 Finished goods 103,870 94,330 $ 111,590 $ 99,837

Property and Equipment, net

Property and Equipment, net	9 Months Ended
	Sep. 30, 2019
Property and Equipment, net
Property and Equipment, net	4. Property and Equipment, net Property and equipment consists of the following: September 30, December 31, 2019 2018 Land $ 3,203 $ 3,614 Buildings and improvements 21,497 20,803 Machinery and equipment 54,264 47,606 Finance lease right-of-use asset 26,001 25,165 Rental equipment 151,764 124,002 Furniture and fixtures 1,693 1,623 Computers and software 3,286 3,094 Gross property and equipment 261,708 225,907 Less: Accumulated depreciation (117,428) (96,412) Net property and equipment 144,280 129,495 Construction in progress 12,844 12,559 Total property and equipment, net $ 157,124 $ 142,054

Long-term Debt

Long-term Debt	9 Months Ended
	Sep. 30, 2019
Long-term Debt.
Long-term Debt	5. Long-term Debt We had no long-term debt outstanding as of September 30, 2019 and December 31, 2018. Credit Agreement On August 21, 2018, Cactus LLC entered into a five-year senior secured asset-based revolving credit facility with a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent for such lenders and as an issuing bank and swingline lender (the “ABL Credit Facility”). The ABL Credit Facility provides for $75.0 million in revolving commitments, up to $15.0 million of which is available for the issuance of letters of credit. Subject to certain terms and conditions set forth in the ABL Credit Facility, Cactus LLC may request additional revolving commitments in an amount not to exceed $50.0 million, for a total of up to $125.0 million in revolving commitments. The ABL Credit Facility matures on August 21, 2023. The maximum amount that Cactus LLC may borrow under the ABL Credit Facility is subject to a borrowing base, which is based on a percentage of eligible accounts receivable and eligible inventory, subject to reserves and other adjustments. At September 30, 2019, in accordance with the terms of our borrowing base, we had access to the full $75.0 million revolving credit facility capacity. The ABL Credit Facility replaced Cactus LLC’s prior credit agreement, dated as of July 31, 2014 (the “Prior Credit Agreement”). The Prior Credit Agreement was repaid in full in February 2018 with the net proceeds of our IPO and was terminated concurrently with the effectiveness of, and as a condition of entering into, the ABL Credit Facility. No loans or letters of credit under the Prior Credit Agreement were outstanding at the time of, or were repaid in connection with, such termination. Cactus LLC’s obligations under the ABL Credit Facility are secured by liens on Cactus LLC’s assets, other than equipment, intellectual property and real estate. Any subsidiary of Cactus LLC that is considered material pursuant to the ABL Credit Facility will be required to (i) guarantee on an unconditional basis all of Cactus LLC’s obligations under the ABL Credit Facility and (ii) grant a lien to secure such guarantee on its assets, other than equipment, intellectual property and real estate. Borrowings under the ABL Credit Facility bear interest at Cactus LLC’s option at either (i) the Alternate Base Rate (as defined therein) (“ABR”), or (ii) the Adjusted LIBO Rate (as defined therein) (“Eurodollar”), plus, in each case, an applicable margin. Letters of credit issued under the ABL Credit Facility accrue fees at a rate equal to the applicable margin for Eurodollar borrowings. The applicable margin ranges from 0.50% to 1.00% per annum for ABR borrowings and 1.50% to 2.00% per annum for Eurodollar borrowings and, in each case, is based on the average quarterly availability under the ABL Credit Facility for the immediately preceding fiscal quarter. The unused portion of the ABL Credit Facility is subject to a commitment fee that varies from 0.250% to 0.375% per annum, according to the average quarterly availability under the ABL Credit Facility for the immediately preceding fiscal quarter. The ABL Credit Facility contains various covenants and restrictive provisions that limit Cactus LLC’s and each of its subsidiaries’ ability to, among other things, incur additional indebtedness and create liens, make investments or loans, enter into asset sales, make certain restricted payments and distributions and engage in transactions with affiliates. The ABL Credit Facility also requires Cactus LLC to maintain a fixed charge coverage ratio of 1.0 to 1.0 based on the ratio of EBITDA (as defined therein) minus Unfinanced Capital Expenditures (as defined therein) to Fixed Charges (as defined therein) during certain periods, including when availability under the ABL Credit Facility is under certain levels. If Cactus LLC fails to perform its obligations under the ABL Credit Facility, (i) the commitments under the ABL Credit Facility could be terminated, (ii) any outstanding borrowings under the ABL Credit Facility may be declared immediately due and payable and (iii) the lenders may commence foreclosure or other actions against the collateral. At September 30, 2019 and December 31, 2018, although there were no borrowings outstanding under the ABL Credit Facility, the applicable margin on our Eurodollar borrowings was 1.5% plus an adjusted base rate of one or three month LIBOR. As of September 30, 2019 and December 31, 2018, we were in compliance with all covenants under the ABL Credit Facility. Loss on Debt Extinguishment During the first quarter of 2018, we recorded a $4.3 million loss on early extinguishment of debt in conjunction with the repayment of the term loan portion of the Prior Credit Agreement with a portion of the net proceeds from our IPO. The loss consists of the write-off of the unamortized balance of debt discount and deferred loan costs of $2.1 million and $2.2 million, respectively. The loss on debt extinguishment is included under other income (expense), net, in the consolidated statements of income.

Revenue

Revenue	9 Months Ended
	Sep. 30, 2019
Revenue
Revenue	6. Revenue Revenue Recognition The majority of our revenues are derived from short-term contracts for fixed consideration. Product sales generally do not include right of return or other significant post-delivery obligations. Revenues are recognized when we satisfy a performance obligation by transferring control of the promised goods or providing services to our customers at a point in time, in an amount specified in the contract with our customer and that reflects the consideration we expect to be entitled to in exchange for those goods or services. We also assess our customers’ ability and intention to pay, which is based on a variety of factors including our customers’ historical payment experience and financial condition. We do not adjust the amount of consideration per the contract for the effects of a significant financing component when we expect, at contract inception, that the period between the transfer of a promised good or service to a customer and when the customer pays for that good or service will be one year or less, which is in substantially all cases. Payment terms and conditions vary, although terms generally include a requirement of payment within 30 to 45 days. Revenues are recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. We treat shipping and handling associated with outbound freight as a fulfillment cost instead of as a separate performance obligation. We recognize the cost for shipping and handling when incurred as an expense in cost of sales. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts with customers contain a single performance obligation to provide agreed-upon products or services. For contracts with multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price. We do not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. Disaggregation of Revenue We disaggregate revenue from contracts with customers into three revenue categories: (i) product revenues, (ii) rental revenues and (iii) field service and other revenues. We have predominately domestic operations, with a small amount of sales being generated in Australia. For the nine months ended September 30, 2019, we derived 56% of total revenues from the sale of our products, 23% of total revenues from rental and 21% of total revenues from field service and other. This compares to 52% of total revenues from the sale of our products, 25% of total revenues from rental and 23% of total revenues from field service and other for the nine months ended September 30, 2018. The following table presents our revenues disaggregated by category: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Product revenue $ 92,582 $ 79,388 $ 273,716 $ 211,595 Rental revenue 35,528 38,135 113,601 102,224 Field service and other revenue 32,698 33,135 100,859 90,492 Total revenue $ 160,808 $ 150,658 $ 488,176 $ 404,311 Contract Balances The timing of our performance can differ from the timing of invoicing and our customers’ payments, which can result in the recording of unbilled revenue within accounts receivable, net, and deferred revenue within accrued expenses and other current liabilities. Balances related to contracts with customers consisted of the following: September 30, December 31, 2019 2018 Unbilled revenue $ 22,027 $ 26,804 Deferred revenue 1,492 1,110 Contract Costs We do not incur any material costs of obtaining contracts.

Leases

Leases	9 Months Ended
	Sep. 30, 2019
Leases
Lease disclosures	7. Leases As a lessee, we lease real estate, apartments, forklifts, vehicles and trucks, and other equipment under non-cancellable agreements. We determine if these contracts are or contain a lease at inception and review the facts and circumstances of the arrangement to classify the leased asset as operating or finance. To assess whether a contract is or contains a lease, we consider whether (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) whether we obtain substantially all the economic benefits from the use of that underlying asset and direct how and for what purpose the asset is used during the term of the contract. The portion of active leases within our portfolio classified as operating leases are included in operating lease right-of-use assets and current and long-term operating lease liabilities on our consolidated balance sheet. The finance lease right-of-use assets portion of the active lease agreements are included in property and equipment and current and long-term finance lease obligations on our consolidated balance sheets. The ROU assets represent our right to use the underlying asset for the lease term and lease liabilities represent our obligation to make minimum lease payments arising from the lease for the duration of the lease term. Certain of our leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or greater. The exercise of lease renewal options is typically at our discretion. Additionally, many leases contain early termination clauses, however, in our active lease agreements, early termination typically requires the concurrence of both parties to the lease. The measurement of the lease term includes options to extend or renew the lease when it is reasonably certain that we will exercise that option. We do not have leases that include options to purchase leased property or that provide for the automatic transfer of ownership of leased property to us, residual value guarantees, or the incurrence by us of other restrictions or covenants. To determine the present value of future minimum lease payments, we use the implicit rate when readily determinable; however, many of our leases do not provide an implicit rate, therefore to determine the present value of minimum lease payments we use our incremental borrowing rate based on the information available at commencement date of the lease. Our finance lease agreements typically include an interest rate that is used to determine the present value of future lease payments. Minimum lease payments are expensed on a straight-line basis over the term of the lease, including reasonably certain renewal options. In addition, some leases may require additional contingent or variable lease payments based on factors specific to the individual agreement. Variable lease payments for which we are typically responsible include payment of real estate taxes and maintenance expenses. These payments are expensed as incurred and recorded as variable lease costs. The following are the components of operating and finance lease costs: Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Finance lease cost: Amortization of right-of-use assets $ 1,967 $ 5,743 Interest expense 230 658 Operating lease cost 1,923 5,732 Short-term lease cost 228 564 Variable lease cost 138 401 Sublease income (118) (336) Total lease cost $ 4,368 $ 12,762 The following is supplemental cash flow information for our operating and finance leases: Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 658 Operating cash flows from operating leases 5,074 Financing cash flows from finance leases 5,660 Total $ 11,392 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 6,251 Finance leases 2,921 Total $ 9,172 The following is the aggregate future lease payments for operating and finance leases as of September 30, 2019: Operating Finance 2019 (remaining) $ 2,011 $ 2,315 2020 7,301 7,440 2021 5,073 3,430 2022 3,829 737 2023 3,042 - Thereafter 9,412 - Total undiscounted lease payments 30,668 13,922 Less: effects of discounting (3,697) (1,222) Present value of lease payments $ 26,971 $ 12,700 The following represents the aggregate future lease payments for operating leases under ASC 840 as of December 31, 2018: Operating 2019 $ 6,638 2020 4,618 2021 3,487 2022 2,195 2023 1,426 Thereafter 3,339 $ 21,703 The following represents the average lease terms and discount rates for our operating and finance lease portfolio as of September 30, 2019: September 30, 2019 Weighted average remaining lease term: Finance leases 1.67 years Operating leases 6.01 years Weighted average discount rate Finance leases 11.87 % Operating leases 3.70 % As a lessor, we rent a fleet of frac valves and ancillary equipment for short-term rental periods, typically one to two months. Our lessor portfolio consists mainly of operating leases for equipment utilized during the drilling, completion and production phases of our customers’ wells. At this time, most lessor agreements contain less than three-month terms with no renewal options that are reasonably certain to exercise, or early termination options based on established terms specific to the individual agreement. See Note 6 for disaggregation of revenue.

Tax Receivable Agreement

Tax Receivable Agreement	9 Months Ended
	Sep. 30, 2019
Tax Receivable Agreement
Tax receivable agreement disclosure	8. Tax Receivable Agreement As discussed in Note 1, pursuant to the Cactus LLC Agreement, each TRA Holder has, subject to certain limitations, their Redemption Right. Alternatively, upon the exercise of the Redemption Right, Cactus Inc. will have its Call Right. Cactus LLC has made for itself (and for each of its direct or indirect subsidiaries that is treated as a partnership for U.S. federal income tax purposes and that it controls) an election under Section 754 of the Internal Revenue Code (the “Code”). Pursuant to the Section 754 election, redemptions of CW Units pursuant to the Redemption Right or the Call Right are expected to result in adjustments to the tax basis of the tangible and intangible assets of Cactus LLC. These adjustments will be allocated to Cactus Inc. In addition, the repayment of borrowings outstanding under the Cactus LLC term loan facility in connection with our IPO resulted in adjustments to the tax basis of the tangible and intangible assets of Cactus LLC, a portion of which will be allocated to Cactus Inc. following its acquisition or deemed acquisition of CW Units from the CW Unit Holders. Such adjustments to the tax basis of the tangible and intangible assets of Cactus LLC would not have been available to Cactus Inc. absent its acquisition or deemed acquisition of CW Units pursuant to the exercise of the Redemption Right or the Call Right. These basis adjustments are expected to increase (for tax purposes) Cactus Inc.’s depreciation and amortization deductions and may also decrease Cactus Inc.’s gains (or increase its losses) on future dispositions of certain assets to the extent tax basis is allocated to those assets. Such increased deductions and losses and reduced gains may reduce the amount of tax that Cactus Inc. would otherwise be required to pay in the future. The TRA generally provides for the payment by Cactus Inc. to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that Cactus Inc. actually realizes or is deemed to realize in certain circumstances as a result of (i) certain increases in tax basis that occur as a result of Cactus Inc.’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s CW Units in connection with our IPO or any subsequent offering, or pursuant to any other exercise of the Redemption Right or the Call Right, (ii) certain increases in tax basis resulting from the repayment of borrowings outstanding under Cactus LLC’s term loan facility in connection with our IPO and (iii) imputed interest deemed to be paid by Cactus Inc. as a result of, and additional tax basis arising from, any payments Cactus Inc. makes under the TRA. We will retain the remaining 15% of the cash savings. The payment obligations under the TRA are Cactus Inc.’s obligations and not obligations of Cactus LLC, and we expect that the payments we will be required to make under the TRA will be substantial. We have determined that it is more likely than not that actual cash tax savings will be realized by Cactus Inc. from the tax benefits resulting from the CW Unit redemptions pursuant to the Redemption Right or the Call Right. Accordingly, the TRA is expected to result in future payments, and we have recorded a total liability from the TRA of $220.9 million included in the consolidated balance sheet as of September 30, 2019 with $14.8 million reflected in current liabilities based on the expected timing of our next payment. Future redemptions of CW Units will create additional liability and follow the same accounting procedures. Estimating the amount and timing of payments that may become due under the TRA is by its nature imprecise and the assumptions used in the estimate can change. For purposes of the TRA, net cash savings in tax generally will be calculated by comparing Cactus Inc.’s actual tax liability (determined by using the actual applicable U.S. federal income tax rate and an assumed combined state and local income tax rate) to the amount it would have been required to pay had it not been able to utilize any of the tax benefits subject to the TRA. The amounts payable, as well as the timing of any payments under the TRA, are dependent upon significant future events and assumptions, including the timing and number of redemptions of CW Units, the price of our Class A common stock at the time of each redemption, the extent to which such redemptions are taxable transactions, the amount of the redeeming unit holder’s tax basis in its CW Units at the time of the relevant redemption, the depreciation and amortization periods that apply to the increase in tax basis, the amount and timing of taxable income we generate in the future and the U.S. federal, state and local income tax rate then applicable, and the portion of Cactus Inc.’s payments under the TRA that constitute imputed interest or give rise to depreciable or amortizable tax basis. A delay in the timing of redemptions of CW Units, holding other assumptions constant, would be expected to decrease the discounted present value of the amounts payable under the TRA as the benefit of the depreciation and amortization deductions would be delayed and the estimated increase in tax basis could be reduced as a result of allocations of Cactus LLC taxable income to the redeeming unit holder prior to the redemption. Stock price increases or decreases at the time of each redemption of CW Units would be expected to result in a corresponding increase or decrease to the benefits subject to the TRA of approximately 125% of the tax-effected change in price and to the undiscounted amounts payable under the TRA in an amount approximately equal to 106% of the tax-effected change in price. The amounts payable under the TRA are dependent upon Cactus Inc. having sufficient future taxable income to utilize the tax benefits on which it is required to make payments under the TRA. If Cactus Inc.’s projected taxable income is significantly reduced, the expected payments would be reduced to the extent such tax benefits do not result in a reduction of Cactus Inc.’s future income tax liabilities. It is possible that future transactions or events could increase or decrease the actual tax benefits realized and the corresponding liability from the TRA. Moreover, there may be a negative impact on our liquidity if, as a result of timing discrepancies or otherwise, (i) the payments under the TRA exceed the actual benefits we realize in respect of the tax attributes subject to the TRA or (ii) distributions to Cactus Inc. by Cactus LLC are not sufficient to permit Cactus Inc. to make payments under the TRA after it has paid its taxes and other obligations. The payments under the TRA will not be conditional on a holder of rights under the TRA having a continued ownership interest in either Cactus LLC or Cactus Inc. In addition, although we are not aware of any issue that would cause the Internal Revenue Service (“IRS”) or other relevant tax authorities to challenge potential tax basis increases or other tax benefits covered under the TRA, the TRA Holders will not reimburse us for any payments previously made under the TRA if such basis increases or other benefits are subsequently disallowed, except that excess payments made to any such holder will be netted against payments otherwise to be made, if any, to such holder after our determination of such excess. As a result, in such circumstances, Cactus Inc. could make payments that are greater than its actual cash tax savings, if any, and may not be able to recoup those payments. We will recognize subsequent changes to the measurement of the liability from the TRA in the income statement as a component of income before taxes. In the case of any changes to any valuation allowance associated with the underlying tax asset, given the link between the tax savings generated and the recognition of the liability from the TRA (i.e., the latter is based on 85% of the former), and the explicit guidance in ASC 740-20-45-11(g) which requires that subsequent changes in a valuation allowance established against deferred tax assets that arose due to change in tax basis as a result of a transaction among or with shareholders to be recorded in the income statement as opposed to equity, we believe recording of the corollary adjustment to the liability from the TRA in the income statement is appropriate. The term of the TRA commenced upon completion of our IPO and will continue until all tax benefits that are subject to the TRA have been utilized or expired, unless we exercise our right to terminate the TRA. In the event that the TRA is not terminated, the payments under the TRA are anticipated to commence in 2019 and to continue for approximately 20 years after the date of the last redemption of CW Units. Accordingly, it is expected that payments will continue to be made under the TRA for more than 25 years. If we elect to terminate the TRA early (or it is terminated early due to certain mergers, asset sales, other forms of business combinations or other changes of control), our obligations under the TRA would accelerate and we would be required to make an immediate payment equal to the present value of the anticipated future payments to be made by us under the TRA (determined by applying a discount rate of one-year LIBOR plus 150 basis points) and such payment is expected to be substantial. The calculation of anticipated future payments will be based upon certain assumptions and deemed events set forth in the TRA, including the assumptions that (i) we have sufficient taxable income to fully utilize the tax benefits covered by the TRA and (ii) any CW Units (other than those held by Cactus Inc.) outstanding on the termination date are deemed to be redeemed on the termination date. Any early termination payment may be made significantly in advance of the actual realization, if any, of the future tax benefits to which the termination payment relates. The TRA provides that in the event that we breach any of our material obligations under the TRA, whether as a result of (i) our failure to make any payment when due (including in cases where we elect to terminate the TRA early, the TRA is terminated early due to certain mergers, asset sales, or other forms of business combinations or changes of control or we have available cash but fail to make payments when due under circumstances where we do not have the right to elect to defer the payment, as described below), (ii) our failure to honor any other material obligation under it or (iii) by operation of law as a result of the rejection of the TRA in a case commenced under the U.S. Bankruptcy Code or otherwise, then the TRA Holders may elect to treat such breach as an early termination, which would cause all our payment and other obligations under the TRA to be accelerated and become due and payable applying the same assumptions described above. As a result of either an early termination or a change of control, we could be required to make payments under the TRA that exceed the actual cash tax savings under the TRA. In these situations, our obligations under the TRA could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, or other forms of business combinations or changes of control. Decisions we make in the course of running our business, such as with respect to mergers, asset sales, other forms of business combinations or other changes in control, may influence the timing and amount of payments that are received by the TRA Holders under the TRA. For example, the earlier disposal of assets following a redemption of CW Units may accelerate payments under the TRA and increase the present value of such payments, and the disposal of assets before a redemption of CW Units may increase the TRA Holders’ tax liability without giving rise to any rights of the TRA Holders to receive payments under the TRA. Such effects may result in differences or conflicts of interest between the interests of the TRA Holders and other shareholders. Payments generally are due under the TRA within five business days following the finalization of the schedule with respect to which the payment obligation is calculated. However, interest on such payments will begin to accrue from the due date (without extensions) of our U.S. federal income tax return for the period to which such payments relate until such payment due date at a rate equal to one-year LIBOR plus 150 basis points. Except in cases where we elect to terminate the TRA early or it is otherwise terminated as described above, generally we may elect to defer payments due under the TRA if we do not have available cash to satisfy our payment obligations under the TRA. Any such deferred payments under the TRA generally will accrue interest from the due date for such payment until the payment date at a rate of one-year LIBOR plus 550 basis points. However, interest will accrue from the due date for such payment until the payment date at a rate of one-year LIBOR plus 150 basis points if we are unable to make such payment as a result of limitations imposed by our credit facility. We have no present intention to defer payments under the TRA. To the extent that we are unable to make payments under the TRA for any reason, such payments will be deferred and will accrue interest until paid. Because we are a holding company with no operations of our own, our ability to make payments under the TRA is dependent on the ability of Cactus LLC to make distributions to us in an amount sufficient to cover our obligations under the TRA. This ability, in turn, may depend on the ability of Cactus LLC’s subsidiaries to make distributions to it. The ability of Cactus LLC, its subsidiaries and other entities in which it directly or indirectly holds an equity interest to make such distributions will be subject to, among other things, the applicable provisions of Delaware law (or other applicable jurisdiction) that may limit the amount of funds available for distribution and restrictions in relevant debt instruments issued by Cactus LLC or its subsidiaries and other entities in which it directly or indirectly holds an equity interest. Additionally, distributions made by Cactus LLC are generally required to be made pro rata among all of its members, including legacy CW Unit Holders, which could be significant. During third quarter 2019, we finalized our 2018 federal tax return for Cactus, Inc. and made a $9.3 million TRA payment, which is equal to 85% of the $10.8 million tax benefit resulting from the exchange of CW Units for shares of Class A common stock during 2018 plus $0.2 million of interest accrued from the original return due date through the payment date at a rate of LIBOR plus 150 basis points. Liability Related to Tax Receivable Agreement The table below presents our contractual obligations for payments of the liability related to the TRA for periods subsequent to September 30, 2019. This table does not include potential pro rata distributions to non-controlling interest members if Cactus LLC is required to make distributions to Cactus Inc. in an amount sufficient to cover its obligations under the TRA. Liability related to TRA Remainder of 2019 $ — 2020 14,815 2021 12,159 2022 12,391 2023 12,655 Thereafter 168,900 $ 220,920

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2019
Income Taxes
Income Taxes	9. Income Taxes Cactus Inc. is a corporation and is subject to U.S. federal and state income taxes related to its ownership percentage in Cactus LLC. Cactus LLC is a limited liability company treated as a partnership for U.S. federal and state income tax purposes and files a U.S. Return of Partnership Income, which includes both our U.S. and foreign operations. Consequently, the members of Cactus LLC are taxed individually on their share of earnings for U.S. federal and state income tax purposes. Additionally, our operations in both Australia and China are subject to local country income taxes. For the three months ended September 30, 2019 and 2018, we recorded income tax expense of $12.2 million (25.4% effective tax rate) and $8.2 million (15.8% effective tax rate), respectively. Income tax expense for the three months ended September 30, 2019 included $2.2 million associated with a reduction of previously anticipated benefits related to Texas franchise tax and $1.9 million related to the write-off of foreign tax credits. For the nine months ended September 30, 2019, we recorded income tax expense of $22.0 million (15.0% effective tax rate), which included a cumulative $4.2 million release of our valuation allowance, as discussed below, largely offset by the adjustments noted above. This is compared to income tax expense of $14.6 million (11.5% effective tax rate) for the nine months ended September 30, 2018. In addition to the partial release of our valuation allowance, our effective tax rate is lower than the statutory federal rate of 21% primarily due to the fact that Cactus Inc. is only subject to federal and state income tax on its share of income of Cactus LLC. Income relating to non-controlling interest is not subject to U.S. federal or state income tax. We recognize deferred tax assets to the extent we believe these assets are more-likely-than-not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. Based upon our cumulative earnings history and forecasted future sources of taxable income, we believe that we will be able to realize the majority of our U.S. deferred tax assets in the future. We do not expect to realize the portion of our deferred tax asset for our investment in Cactus LLC that may only be realizable through the sale or liquidation of the investment and our ability to generate sufficient capital gains. As of September 30, 2019, we have a valuation allowance of $23.2 million against this deferred tax asset. For the nine months ended September 30, 2019, as a result of the March 2019 Secondary Offering and redemptions of CW Units, we released $4.2 million of our valuation allowance and recorded a tax benefit of $4.2 million related to the realizable portion of the deferred tax asset.

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2019
Related Party Transactions
Related Party Transactions	10 . Related Party Transactions From time to time, we rent an airplane under dry-lease from a company owned by a member of Cactus LLC. These transactions are under short-term rental arrangements. During the three months ended September 30, 2019 and 2018, expense recognized in connection with these rentals totaled less than $0.1 million and $0.1 million, respectively. For the nine months ended September 30, 2019 and 2018, expense recognized in connection with these rentals totaled $0.2 million and $0.1 million, respectively. As of both September 30, 2019 and December 31, 2018, Cactus LLC owed less than $0.1 million to the related party, which is included in accounts payable in the consolidated balance sheets. We are also party to the TRA with certain direct and indirect holders of CW Units, including certain of our officers, directors and employees. These TRA Holders have the right to receive 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that Cactus Inc. actually realizes or is deemed to realize in certain circumstances. The total TRA liability as of September 30, 2019 was $220.9 million. The estimated annual amounts and timing of this liability is presented in Note 8. Distributions made by Cactus LLC are generally required to be made pro rata among all of its members. During the nine months ended September 30, 2019, Cactus LLC distributed $9.9 million to Cactus Inc. to fund the 2019 TRA liability payments and estimated tax payments and made pro rata distributions to its other members totaling $5.9 million. For the nine months ended September 30, 2018, Cactus LLC made a $3.8 million distribution to Cactus Inc. to fund its quarterly estimated tax payments to the IRS and made a pro rata distribution of $5.8 million to its other members. These distributions were funded by cash flow generated from operating activities. Prior to our IPO, Cactus LLC made a cash distribution of $26.0 million to pre-IPO owners on January 25, 2018. The purpose of the distribution was primarily to provide funds to these owners to pay their federal and state tax liabilities associated with taxable income recognized by them for periods prior to the completion of our IPO as a result of their ownership interests in Cactus LLC.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2019
Commitments and Contingencies
Commitments and Contingencies	11. Commitments and Contingencies Legal Contingencies We are involved in various disputes arising in the ordinary course of business. Management does not believe the outcome of these disputes will have a material adverse effect on our consolidated financial position or consolidated results of operations.

Employee Benefit Plans

Employee Benefit Plans	9 Months Ended
	Sep. 30, 2019
Employee Benefit Plans
Employee Benefit Plans	12. Employee Benefit Plans 401K Plan Our employees within the United States are eligible to participate in a 401(k) plan (the “Plan”) sponsored by us. These employees are eligible to participate upon employment hire date and reaching the age of eighteen. All eligible employees may contribute a percentage of their compensation subject to a maximum imposed by the Code. We match 100% of the first 3% of gross pay contributed by each employee and 50% of the next 4% of gross pay contributed by each employee. We may also make additional non-elective employer contributions at our discretion under the Plan. Similar benefit plans exist for employees of our foreign subsidiaries. During the three months ended September 30, 2019 and 2018, employer matching contributions totaled $0.8 million and $1.0 million, respectively. For the nine months ended September 30, 2019 and 2018 employer matching contributions totaled $2.5 million and $2.6 million, respectively. During the nine months ended September 30, 2019, we made a non-elective contribution of $0.1 million under the Plan.

Stock-based Compensation

Stock-based Compensation	9 Months Ended
	Sep. 30, 2019
Stock-based Compensation
Stock-based Compensation	13. Stock-based Compensation Long-term Incentive Plan We have a long-term incentive plan (“LTIP”) to incentivize individuals providing services to us or our affiliates. The LTIP provides for the grant, from time to time, at the discretion of our compensation committee of our board of directors, of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, dividend equivalents, other stock-based awards, cash awards, substitute awards and performance awards. Any individual who is an officer or employee or an officer or employee of any of our affiliates, and any other person who provides services to us or our affiliates, including members of our board of directors, will be eligible to receive awards under the LTIP at the discretion of our board of directors. Restricted Stock Units Restricted stock units (“RSU’s”) granted pursuant to the LTIP are expected to be settled in shares of our Class A common stock if they vest. The following table is a summary of restricted stock unit activity: Nine Months Ended No. of RSU's Weighted Average Grant Date Fair Value (in thousands) Nonvested as of December 31, 2018 782 $ 19.84 Granted 204 $ 37.37 Vested (271) $ 19.35 Forfeited (30) $ 22.90 Nonvested as of September 30, 2019 685 $ 25.13 Stock-based Compensation We measure the cost of equity-based awards based on the grant date fair value, and we allocate the compensation expense over the corresponding service period, which is usually the vesting period, using the straight-line method. All grant date fair values are expensed immediately for awards that are fully vested as of the grant date. During the three and nine months ended September 30, 2019 we recorded $1.7 million and $5.3 million, respectively, of stock-based compensation expense. During the three and nine months ended September 30, 2018, we recorded $1.3 million and $3.4 million, respectively, of stock-based compensation expense. Stock-based compensation expense is primarily recorded in selling, general and administrative expenses. There was approximately $12.5 million of unrecognized compensation expense relating to the unvested RSU’s as of September 30, 2019. The unrecognized compensation expense will be recognized over the weighted average remaining vesting period of 2.1 years.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2019
Earnings Per Share
Earnings Per Share	14. Earnings per Share Basic earnings per share of Class A common stock is calculated by dividing the net income attributable to Cactus Inc. during the period by the weighted average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share of Class A common stock is calculated by dividing the net income attributable to Cactus Inc. during that period by the weighted average number of common shares outstanding assuming all potentially dilutive shares were issued. We use the “if-converted” method to determine the potential dilutive effect of outstanding CW Units (and corresponding shares of outstanding Class B common stock), and the treasury stock method to determine the potential dilutive effect of unvested restricted stock units assuming that the proceeds will be used to purchase shares of Class A common stock. There were no shares of Class A common stock or Class B common stock outstanding prior to February 12, 2018, therefore no earnings per share information has been presented for any period prior to that date. The following table summarizes the basic and diluted earnings per share calculations: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Numerator: Net income attributable to Cactus Inc.—basic $ 19,339 $ 18,672 $ 67,554 $ 34,759 Net income attributable to non-controlling interest (1) — — 45,683 — Net income attributable to Cactus Inc.—diluted (1) $ 19,339 $ 18,672 $ 113,237 $ 34,759 Denominator: Weighted average Class A shares outstanding—basic 47,095 35,821 44,260 30,182 Effect of dilutive shares (2) 227 408 31,077 340 Weighted average Class A shares outstanding—diluted (2) 47,322 36,229 75,337 30,522 Earnings per Class A share—basic $ 0.41 $ 0.52 $ 1.53 $ 1.15 Earnings per Class A share—diluted (1) (2) $ 0.41 $ 0.52 $ 1.50 $ 1.14 (1) Under the if-converted method for the nine months ended September 30, 2019, the numerator is adjusted in the calculation of diluted earnings per share to include $60.1 million of additional pre-tax income attributable to non-controlling interest adjusted for a corporate effective tax rate of 24%. (2) Diluted earnings per share for the three months ended September 30, 2019 excludes 28.0 million shares of Class B common stock as the effect would be anti-dilutive. Diluted earnings per share for the nine months ended September 30, 2019 includes 30.8 million shares of Class B common stock assuming conversion, plus the dilutive effect of 0.3 million shares of restricted stock unit awards. Diluted earnings per share for the three and nine months ended September 30, 2018 excludes 39.1 million and 44.7 million shares of Class B common stock, respectively, as the effect would be anti-dilutive.

Supplemental Cash Flow Informat

Supplemental Cash Flow Information	9 Months Ended
	Sep. 30, 2019
Supplemental Cash Flow Information
Supplemental Cash Flow Information	15. Supplemental Cash Flow Information Non-cash investing and financing activities were as follows: Nine Months Ended 2019 2018 Property and equipment acquired under finance leases $ 2,921 $ 8,199 Property and equipment in payables 4,968 3,001 See Note 7 for non-cash operating activities relating to operating leases. In conjunction with our IPO, we issued and contributed shares of Class B common stock to owners of CW Units equal to the number of outstanding CW Units held by such owners. The Class B common stock has no economic interest and does not share in cash dividends or liquidation rights. During the three and nine months ended September 30, 2019, we issued less than 0.1 million shares and 9.2 million shares, respectively, of Class A common stock for no proceeds pursuant to redemptions of CW Units by holders thereof.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2019
Subsequent Events
Subsequent Events	16. Subsequent Events On October 29, 2019, Cactus Inc.’s board of directors declared a cash dividend of $0.09 per share of Class A common stock to be paid on December 19, 2019 to holders of record of Class A common stock as of December 2, 2019. Cactus LLC will pay a corresponding distribution of $0.09 per CW Unit to each holder of CW Units, which will have the same record and payment dates as applicable to the dividend declared with respect to the Class A common stock.

Preparation of Interim Financ_2

Preparation of Interim Financial Statements and Other Items (Policies)	9 Months Ended
	Sep. 30, 2019
Preparation Of Interim Financial Statements And Other Items
Basis of Presentation	Basis of Presentation The unaudited condensed consolidated financial statements (“consolidated financial statements” or “consolidated balance sheets” or “consolidated statements of income”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These consolidated financial statements include the accounts of Cactus Inc. and its wholly owned subsidiaries. Accordingly, these consolidated financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read together with our Annual Report on Form 10‑K for the year ended December 31, 2018. All significant intercompany transactions and balances have been eliminated upon consolidation. The consolidated financial statements include all adjustments, which are of a normal recurring nature, unless otherwise disclosed, necessary for a fair statement of the consolidated financial statements for the interim periods. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. As discussed in Note 1, as a result of our IPO and related equity transactions (the “Reorganization”), Cactus Inc. is the sole managing member of Cactus LLC and consolidates the financial results of Cactus LLC and its subsidiaries and reports a non-controlling interest related to the portion of CW Units not owned by Cactus Inc., which reduces net income attributable to holders of Class A common stock. The Reorganization was considered a transaction between entities under common control. As a result, the financial statements for periods prior to our IPO and the Reorganization have been adjusted to combine the previously separate entities for presentation purposes. Our operations are organized into a single reporting segment.
Limitation of Members’ Liability	Limitation of Members’ Liability Under the terms of the Cactus LLC Agreement, the members of Cactus LLC are not obligated for debt, liabilities, contracts or other obligations of Cactus LLC. Profits and losses are allocated to members as defined in the Cactus LLC Agreement.
Interim Period Tax Allocation	Interim Period Tax Allocation For interim income tax reporting we estimate our annual effective tax rate and apply it to our year-to-date ordinary income. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur. Net income attributable to Cactus Inc. includes Cactus Inc.’s U.S. federal and state income tax expense. Net income attributable to non-controlling interest is not subject to U.S. federal and state income tax.
Significant Customers	Significant Customers For the nine months ended September 30, 2019 and 2018, one customer represented 10% and 11%, respectively, of consolidated revenues, and no other customers represented 10% or more of our consolidated revenues during the comparative periods.
Significant Vendors	Significant Vendors We purchase a significant portion of supplies, equipment and machined components from a single vendor. For the nine months ended September 30, 2019 and 2018, purchases from this vendor totaled $30.3 million and $36.4 million, respectively. These figures represent approximately 17% and 22% for the respective periods of our total third-party vendor purchases of raw materials, finished products, equipment, machining and other services. Amounts due to the vendor included in accounts payable in the consolidated balance sheets as of September 30, 2019 and December 31, 2018 totaled $5.4 million and $5.0 million, respectively.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include but are not limited to estimated losses on accounts receivable, estimated realizable value of excess and obsolete inventory, assessments of long-lived assets for possible impairment and estimates of deferred tax assets related to the step-up in basis under the TRA and the associated liability under the TRA. Actual results could differ from those estimates.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Standards Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which amends the FASB Accounting Standards Codification (“ASC”) and creates Topic 842, Leases. On January 1, 2019, we adopted ASC Topic 842, which is effective for interim and annual reporting periods beginning on or after December 15, 2018. This Topic requires balance sheet recognition of lease assets and lease liabilities for leases classified as operating leases under previous GAAP. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. To adopt Topic 842, we elected the modified retrospective approach and as of January 1, 2019, there was no cumulative-effect adjustment required to the opening balance of retained earnings. We completed a review of contracts representative of our business and assessed the terms under the new standard. Adoption of the standard resulted in the recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases on our consolidated balance sheets but did not have a material impact on our consolidated statements of income and consolidated statements of comprehensive income or consolidated statements of cash flows. Our accounting for finance leases remained substantially unchanged. Adoption of this standard resulted in the recognition of operating lease ROU assets of $25.3 million, reversal of previously recorded deferred rent of $0.5 million, and corresponding operating short-term and long-term lease liabilities of $6.2 million and $19.6 million, respectively, on the consolidated balance sheet as of January 1, 2019. See Note 7 for further details regarding leases. In addition, we utilized the package of practical expedients permitted under the transition guidance within the standard. The expedient package allowed us to not reassess whether existing contracts contained a lease, to not reassess the lease classification of existing leases, and to not consider the initial direct cost for existing leases. In addition to the package of practical expedients, we also utilized expedients and elections allowing for the exclusion of leases with terms of less than twelve months across all asset classes, the portfolio approach to determine discount rates, the election to not separate non-lease components from lease components and to not apply the use of hindsight to the existing lease population. As a lessor, recognition of lease revenue associated with short-term equipment rentals remained consistent with previous guidance and the adoption of this standard did not have a significant impact on our consolidated statements of income. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this update allow a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this update also require certain disclosures about stranded tax effects. The amendments in this update are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. We adopted this ASU on January 1, 2019. The adoption of this pronouncement did not have an impact on our consolidated financial statements. Standards Not Yet Adopted In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350), which simplifies the accounting for goodwill impairment by eliminating Step 2 of the current goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the new standard, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance should be adopted for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. We do not expect the adoption of this pronouncement will have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 changes the measurement of credit losses on financial assets measured at amortized cost, including but not limited to trade receivables. The new guidance replaces the current methodology for recognizing credit losses when it is probable that a loss has been incurred (incurred loss model) with an expected loss model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of an asset. Application of this new guidance may result in an earlier recognition of credit losses as the allowance for credit losses is measured and recorded upon the initial recognition of the financial asset. The allowance for credit losses under the new guidance represents the portion of the asset’s amortized cost basis that we do not expect to collect over the asset’s contractual life, considering past events, current conditions and reasonable and supportable forecasts of future economic conditions. The new standard is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, with a modified-retrospective approach to be used for implementation. Our historical credit losses have been insignificant due to our proven ability to collect on our trade receivables. Therefore, we believe that our expected future credit losses will not be significant and do not believe that the adoption of ASU 2016-13 will have a material impact on our consolidated financial statements. We are in the process of finalizing our methodology for estimating expected credit losses, including the assumptions used in order to pool receivables with similar risk characteristics.

Organization and Nature of Op_2

Organization and Nature of Operations (Tables)	9 Months Ended
	Sep. 30, 2019
Organization and Nature of Operations
Schedule of CW units held by legacy CW unit holders	CW Units CW Units held by legacy CW Unit Holders as of February 7, 2018 60,558 IPO (12,118) July 2018 follow-on offering (11,197) Other CW Unit redemptions (7) CW Units held by legacy CW Unit Holders as of December 31, 2018 37,236 March 2019 Secondary Offering (8,474) Other CW Unit redemptions (747) CW Units held by legacy CW Unit Holders as of September 30, 2019 28,015

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2019
Inventories
Summary of inventories	September 30, December 31, 2019 2018 Raw materials $ 1,642 $ 1,925 Work-in-progress 6,078 3,582 Finished goods 103,870 94,330 $ 111,590 $ 99,837

Property and Equipment, net (Ta

Property and Equipment, net (Tables)	9 Months Ended
	Sep. 30, 2019
Property and Equipment, net
Schedule of property and equipment net	September 30, December 31, 2019 2018 Land $ 3,203 $ 3,614 Buildings and improvements 21,497 20,803 Machinery and equipment 54,264 47,606 Finance lease right-of-use asset 26,001 25,165 Rental equipment 151,764 124,002 Furniture and fixtures 1,693 1,623 Computers and software 3,286 3,094 Gross property and equipment 261,708 225,907 Less: Accumulated depreciation (117,428) (96,412) Net property and equipment 144,280 129,495 Construction in progress 12,844 12,559 Total property and equipment, net $ 157,124 $ 142,054

Revenue (Tables)

Revenue (Tables)	9 Months Ended
	Sep. 30, 2019
Revenue
Revenues disaggregated by category	Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Product revenue $ 92,582 $ 79,388 $ 273,716 $ 211,595 Rental revenue 35,528 38,135 113,601 102,224 Field service and other revenue 32,698 33,135 100,859 90,492 Total revenue $ 160,808 $ 150,658 $ 488,176 $ 404,311
Contracts with customers assets and liabilities	September 30, December 31, 2019 2018 Unbilled revenue $ 22,027 $ 26,804 Deferred revenue 1,492 1,110

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 30, 2019
Leases
Components of operating and finance lease costs	Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Finance lease cost: Amortization of right-of-use assets $ 1,967 $ 5,743 Interest expense 230 658 Operating lease cost 1,923 5,732 Short-term lease cost 228 564 Variable lease cost 138 401 Sublease income (118) (336) Total lease cost $ 4,368 $ 12,762
Schedule of supplemental cash flow information related to operating and finance leases	Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 658 Operating cash flows from operating leases 5,074 Financing cash flows from finance leases 5,660 Total $ 11,392 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 6,251 Finance leases 2,921 Total $ 9,172
Schedule of operating lease future lease payments under ASC 842	Operating Finance 2019 (remaining) $ 2,011 $ 2,315 2020 7,301 7,440 2021 5,073 3,430 2022 3,829 737 2023 3,042 - Thereafter 9,412 - Total undiscounted lease payments 30,668 13,922 Less: effects of discounting (3,697) (1,222) Present value of lease payments $ 26,971 $ 12,700
Schedule of finance lease future lease payments under ASC 842	Operating Finance 2019 (remaining) $ 2,011 $ 2,315 2020 7,301 7,440 2021 5,073 3,430 2022 3,829 737 2023 3,042 - Thereafter 9,412 - Total undiscounted lease payments 30,668 13,922 Less: effects of discounting (3,697) (1,222) Present value of lease payments $ 26,971 $ 12,700
Schedule of operating lease future payments under Topic 840	Operating 2019 $ 6,638 2020 4,618 2021 3,487 2022 2,195 2023 1,426 Thereafter 3,339 $ 21,703
Schedule of weighted-average lease terms and weighted-average discount rates	September 30, 2019 Weighted average remaining lease term: Finance leases 1.67 years Operating leases 6.01 years Weighted average discount rate Finance leases 11.87 % Operating leases 3.70 %

Tax Receivable Agreement (Table

Tax Receivable Agreement (Tables)	9 Months Ended
	Sep. 30, 2019
Tax Receivable Agreement
Contractual obligation for payments of liability related to the Tax Receivable Agreement	Liability related to TRA Remainder of 2019 $ — 2020 14,815 2021 12,159 2022 12,391 2023 12,655 Thereafter 168,900 $ 220,920

Stock-based Compensation (Table

Stock-based Compensation (Tables)	9 Months Ended
	Sep. 30, 2019
Stock-based Compensation
Summary of restricted stock unit awards	Nine Months Ended No. of RSU's Weighted Average Grant Date Fair Value (in thousands) Nonvested as of December 31, 2018 782 $ 19.84 Granted 204 $ 37.37 Vested (271) $ 19.35 Forfeited (30) $ 22.90 Nonvested as of September 30, 2019 685 $ 25.13

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2019
Earnings Per Share
Summary of basic and diluted earnings per share	The following table summarizes the basic and diluted earnings per share calculations: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Numerator: Net income attributable to Cactus Inc.—basic $ 19,339 $ 18,672 $ 67,554 $ 34,759 Net income attributable to non-controlling interest (1) — — 45,683 — Net income attributable to Cactus Inc.—diluted (1) $ 19,339 $ 18,672 $ 113,237 $ 34,759 Denominator: Weighted average Class A shares outstanding—basic 47,095 35,821 44,260 30,182 Effect of dilutive shares (2) 227 408 31,077 340 Weighted average Class A shares outstanding—diluted (2) 47,322 36,229 75,337 30,522 Earnings per Class A share—basic $ 0.41 $ 0.52 $ 1.53 $ 1.15 Earnings per Class A share—diluted (1) (2) $ 0.41 $ 0.52 $ 1.50 $ 1.14 (1) Under the if-converted method for the nine months ended September 30, 2019, the numerator is adjusted in the calculation of diluted earnings per share to include $60.1 million of additional pre-tax income attributable to non-controlling interest adjusted for a corporate effective tax rate of 24%. Diluted earnings per share for the three months ended September 30, 2019 excludes 28.0 million shares of Class B common stock as the effect would be anti-dilutive. Diluted earnings per share for the nine months ended September 30, 2019 includes 30.8 million shares of Class B common stock assuming conversion, plus the dilutive effect of 0.3 million shares of restricted stock unit awards. Diluted earnings per share for the three and nine months ended September 30, 2018 excludes 39.1 million and 44.7 million shares of Class B common stock, respectively, as the effect would be anti-dilutive.

Supplemental Cash Flow Inform_2

Supplemental Cash Flow Information (Tables)	9 Months Ended
	Sep. 30, 2019
Supplemental Cash Flow Information
Schedule of non cash investing and financing activities	Nine Months Ended 2019 2018 Property and equipment acquired under finance leases $ 2,921 $ 8,199 Property and equipment in payables 4,968 3,001

Organization and Nature of Op_3

Organization and Nature of Operations - Redemption of CW Units (Details) - $ / shares	Mar. 20, 2019	Feb. 12, 2018	Mar. 31, 2019	Jul. 31, 2018	Sep. 30, 2019	Dec. 31, 2018	Feb. 07, 2018
Redemptions of CW Units
CW Units held by legacy CW Unit Holders					28,015,000	37,236,000	60,558,000
CW Unit redemptions					(747,000)	(7,000)
IPO
Redemptions of CW Units
CW Unit redemptions		(12,118,000)
July 2018 follow-on offering
Redemptions of CW Units
CW Unit redemptions				(11,197,000)
March 2019 Secondary Offering
Redemptions of CW Units
CW Unit redemptions	8,500,000		(8,474,000)
Class A Common Stock
Organization and Nature of Operations
Common stock, par value					$ 0.01	$ 0.01
Redemptions of CW Units
Redemption ratio, shares of common stock per unit redeemed					1
Class B Common Stock
Organization and Nature of Operations
Common stock, par value					$ 0.01	$ 0.01

Organization and Nature of Op_4

Organization and Nature of Operations - Redemptions and ownership (Details) - USD ($) shares in Thousands, $ in Thousands	Mar. 21, 2019	Mar. 20, 2019	Feb. 12, 2018	Mar. 31, 2019	Sep. 30, 2019	Sep. 30, 2019	Dec. 31, 2018	Feb. 11, 2018
Redemptions of CW Units
CW Unit redemptions						(747)	(7)
Reduction of non-controlling interest for correction of follow-on offering reclassification						$ 14,500
Increase to equity from reclassification adjustment to follow-on offering						14,000
Increase to AOCL from reclassification adjustment to follow-on offering						500
Prior period reclassification adjustment					$ (506)	$ (506)
Tax Receivable Agreement (TRA)
Tax savings payable to TRA Holders (as a percent)			85.00%
Portion of net cash savings per tax agreement retained by entity			15.00%
Cactus LLC
Ownership
Ownership percentage						62.70%	50.30%
Non-controlling Interest
Redemptions of CW Units
Prior period reclassification adjustment					$ 960	$ 960
Cactus LLC
Redemptions of CW Units
Increase to equity in non-controlling interest						$ 48,400
March 2019 Secondary Offering
Redemptions of CW Units
CW Unit redemptions		8,500		(8,474)
March 2019 Secondary Offering | Other income (expense)
Redemptions of CW Units
Offering expenses				$ 1,000
Class A Common Stock
Redemptions of CW Units
Number of shares issued						700
Ownership
Common stock, shares outstanding					47,100	47,100	37,654	0
Voting power of shares outstanding as a percent of the total shares outstanding						62.70%
Class A Common Stock | March 2019 Secondary Offering
Redemptions of CW Units
Number of shares issued	8,500
Number of shares sold by certain other selling stockholders		26
Class B Common Stock
Redemptions of CW Units
Common stock redeemed (in shares)		8,500
Number of shares canceled						700
Economic interest of shares					$ 0	$ 0
Ownership
Common stock, shares outstanding					28,015	28,015	37,236	0
Voting power of shares outstanding as a percent of the total shares outstanding						37.30%
Class B Common Stock | March 2019 Secondary Offering
Redemptions of CW Units
Number of shares canceled	8,500

Preparation of Interim Financ_3

Preparation of Interim Financial Statements and Other Items - Significant Customers and Concentration of Credit Risk (Details) $ in Millions	9 Months Ended
	Sep. 30, 2019USD ($)customer	Sep. 30, 2018USD ($)customer	Dec. 31, 2018USD ($)
Total revenues | Customer
Significant Customers and Concentration of Credit Risk
Number of Customers | customer	1	1
Concentration of risk (as a percent)	10.00%	11.00%
Purchases | Supplier concentration
Significant Customers and Concentration of Credit Risk
Concentration of risk (as a percent)	17.00%	22.00%
Purchases from the vendor	$ 30.3	$ 36.4
Accounts Payable	$ 5.4		$ 5

Preparation of Interim Financ_4

Preparation of Interim Financial Statements and Other Items - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands	Jan. 01, 2019	Sep. 30, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets, net		$ 26,537
Short-term operating lease liabilities		6,739
Long-term operating lease liabilities		$ 20,232
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounting Standards Update adopted	true
ASU method of adoption	Modified Retrospective
Operating lease right-of-use assets, net	$ 25,300
Deferred rent	(500)
Short-term operating lease liabilities	6,200
Long-term operating lease liabilities	$ 19,600
Use of lease practical expedient package	true
Use of hindsight in the active lease population	false
Cumulative effect adjustment to retained earnings	$ 0
ASU 2018-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounting Standards Update adopted	true
ASU adopted - effect of adoption	$ 0

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Summary of inventories
Raw materials	$ 1,642	$ 1,925
Work-in-progress	6,078	3,582
Finished goods	103,870	94,330
Total inventory	$ 111,590	$ 99,837

Property and Equipment, net (De

Property and Equipment, net (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 261,708	$ 225,907
Less: Accumulated depreciation	(117,428)	(96,412)
Net property and equipment	144,280	129,495
Total property and equipment, net	157,124	142,054
Land
Property, Plant and Equipment [Line Items]
Gross property and equipment	3,203	3,614
Buildings and improvements
Property, Plant and Equipment [Line Items]
Gross property and equipment	21,497	20,803
Machinery and equipment
Property, Plant and Equipment [Line Items]
Gross property and equipment	54,264	47,606
Finance lease right-of-use asset
Property, Plant and Equipment [Line Items]
Gross property and equipment	26,001	25,165
Rental equipment
Property, Plant and Equipment [Line Items]
Gross property and equipment	151,764	124,002
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Gross property and equipment	1,693	1,623
Computers and software
Property, Plant and Equipment [Line Items]
Gross property and equipment	3,286	3,094
Construction in progress
Property, Plant and Equipment [Line Items]
Total property and equipment, net	$ 12,844	$ 12,559

Long-term Debt - Credit agreeme

Long-term Debt - Credit agreement (Details) - USD ($) $ in Millions	Aug. 21, 2018	Feb. 12, 2018	Sep. 30, 2019	Dec. 31, 2018	Feb. 28, 2018
Long-term Debt
Long-term debt outstanding			$ 0	$ 0
Variable reference rate		one-year LIBOR
One-month LIBOR
Long-term Debt
Applicable margin rate (as a percent)			1.50%	1.50%
Variable reference rate			one-month LIBOR	one-month LIBOR
Three-month LIBOR
Long-term Debt
Applicable margin rate (as a percent)			1.50%	1.50%
Variable reference rate			three-month LIBOR	three-month LIBOR
Prior Credit Agreement
Long-term Debt
Amount outstanding					$ 0
Letters of credit outstanding					$ 0
ABL Credit Facility
Long-term Debt
Long-term debt outstanding			$ 0	$ 0
Revolving credit facility available per borrowing base terms			$ 75
Cactus LLC | ABL Credit Facility
Long-term Debt
Debt term	5 years
Maximum borrowing capacity	$ 75
Additional revolving commitment that may be requested subject to certain terms and conditions	50
Total of revolving commitments	125
Fixed charge coverage ratio			1
Cactus LLC | ABL Credit Facility | Minimum
Long-term Debt
Commitment fee (as a percent)			0.25%
Cactus LLC | ABL Credit Facility | Minimum | Alternate Base Rate
Long-term Debt
Applicable margin rate (as a percent)			0.50%
Cactus LLC | ABL Credit Facility | Minimum | Eurodollar
Long-term Debt
Applicable margin rate (as a percent)			1.50%
Cactus LLC | ABL Credit Facility | Maximum
Long-term Debt
Commitment fee (as a percent)			0.375%
Cactus LLC | ABL Credit Facility | Maximum | Alternate Base Rate
Long-term Debt
Applicable margin rate (as a percent)			1.00%
Cactus LLC | ABL Credit Facility | Maximum | Eurodollar
Long-term Debt
Applicable margin rate (as a percent)			2.00%
Cactus LLC | Letters of credit
Long-term Debt
Maximum borrowing capacity	$ 15

Long-term Debt - Loss on debt e

Long-term Debt - Loss on debt extinguishment (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2018	Sep. 30, 2018
Gain (Loss) on Extinguishment of Debt [Abstract]
Loss on debt extinguishment	$ 4,300	$ 4,305
Loss on early extinguishment related to the write-off of unamortized debt discount	2,100
Loss on early debt extinguishment related to write off of deferred loan costs	$ 2,200

Revenue (Details)

Revenue (Details)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Product revenue
Disaggregation of revenues
Total revenue	56.00%	52.00%
Rental revenue
Disaggregation of revenues
Total revenue	23.00%	25.00%
Field service and other revenue
Disaggregation of revenues
Total revenue	21.00%	23.00%

Revenue - Disaggregated by cate

Revenue - Disaggregated by category (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Total revenues	$ 160,808	$ 150,658	$ 488,176	$ 404,311
Product revenue
Disaggregation of Revenue [Line Items]
Total revenues	92,582	79,388	273,716	211,595
Rental revenue
Disaggregation of Revenue [Line Items]
Total revenues	35,528	38,135	113,601	102,224
Field service and other revenue
Disaggregation of Revenue [Line Items]
Total revenues	$ 32,698	$ 33,135	$ 100,859	$ 90,492

Revenue - Contracts with custom

Revenue - Contracts with customers (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Contract Balances
Unbilled revenue	$ 22,027	$ 26,804
Deferred revenue	$ 1,492	$ 1,110

Leases (Details)

Leases (Details)	9 Months Ended
	Sep. 30, 2019
Lessee, Lease, Description [Line Items]
Operating lease option to terminate	true
Finance lease option to terminate	true
Minimum
Lessee, Lease, Description [Line Items]
Length of potential lease renewal for operating leases	1 year
Length of potential lease renewal for finance leases	1 year
Maximum
Lessee, Lease, Description [Line Items]
Length of potential lease renewal for operating leases	10 years
Length of potential lease renewal for finance leases	10 years

Leases - Components of lease co

Leases - Components of lease costs (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Operating and finance lease costs
Amortization of right-of-use assets	$ 1,967	$ 5,743
Interest expense	230	658
Operating lease cost	1,923	5,732
Short-term lease cost	228	564
Variable lease cost	138	401
Sublease income	(118)	(336)
Total lease cost	$ 4,368	$ 12,762

Leases - Supplemental cash flow

Leases - Supplemental cash flow (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$ 658
Operating cash flows from operating leases	5,074
Financing cash flows from finance leases	5,660
Total	11,392
Right-of-use assets obtained for new lease obligations:
Operating leases	6,251
Finance leases	2,921
Total	$ 9,172

Leases - Future lease payments

Leases - Future lease payments (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Operating leases
2019 (remaining)	$ 2,011
2020	7,301
2021	5,073
2022	3,829
2023	3,042
Thereafter	9,412
Total undiscounted lease payments	30,668
Less: Imputed interest	(3,697)
Present value of lease payments	26,971
Finance leases
2019 (remaining)	2,315
2020	7,440
2021	3,430
2022	737
Total undiscounted lease payments	13,922
Less: Imputed interest	(1,222)
Present value of lease payments	$ 12,700
Operating leases under ASC 840
2019		$ 6,638
2020		4,618
2021		3,487
2022		2,195
2023		1,426
Thereafter		3,339
Total		$ 21,703

Leases - Quantitative informati

Leases - Quantitative information (Details)	Sep. 30, 2019
Weighted average remaining lease term:
Finance lease, weighted average remaining lease term	1 year 8 months 1 day
Operating Lease, weighted average remaining lease term	6 years 4 days
Weighted average discount rate
Finance lease, weighted average discount rate, percent	11.87%
Operating lease, weighted average discount rate, percent	3.70%

Leases - Lessor (Details)

Leases - Lessor (Details)	9 Months Ended
	Sep. 30, 2019
Lessor, Lease, Description [Line Items]
Lessor, Operating Lease, Existence of Option to Extend [true false]	false
Lessor, Operating Lease, Existence of Option to Terminate [true false]	false
Minimum
Lessor, Lease, Description [Line Items]
Short-term rental periods for equipment	1 month
Maximum
Lessor, Lease, Description [Line Items]
Short-term rental periods for equipment	2 months
Lessor, Operating Lease, Term of Contract	3 months

Tax Receivable Agreement (Detai

Tax Receivable Agreement (Details) - USD ($) $ in Thousands	Feb. 12, 2018	Sep. 30, 2019	Sep. 30, 2019
Tax receivable agreement
Tax savings payable to TRA Holders (as a percent)	85.00%
Tax savings benefit recorded as APIC (as a percent)	15.00%
Total TRA liability		$ 220,920	$ 220,920
Amount of expected change in benefits subject to the TRA from stock price increases or decreases, as a percentage of the tax-effected change in price			125.00%
Amount of expected change in undiscounted amounts payable under the TRA from stock price changes, as a percentage of the tax-effected change in price			106.00%
Payment period, after redemption	20 years
Variable reference rate	one-year LIBOR
TRA payment period			5 days
TRA payment		9,300
TRA tax benefit		10,800
TRA interest accrued		$ 200
Minimum
Tax receivable agreement
Aggregate payment period	25 years
One-year LIBOR
Tax receivable agreement
Applicable margin rate (as a percent)	1.50%
Variable interest rate, deferral period			5.50%

Tax Receivable Agreement - Cont

Tax Receivable Agreement - Contract obligation maturities (Details) $ in Thousands	Sep. 30, 2019USD ($)
Liability related to TRA
2020	$ 14,815
2021	12,159
2022	12,391
2023	12,655
Thereafter	168,900
Total	$ 220,920

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Tax Disclosure [Line Items]
Effective combined Federal and state tax rate	25.40%	15.80%	15.00%	11.50%
Statutory federal tax rate (as a percent)			21.00%
Income Tax Expense (Benefit)	$ 12,221	$ 8,215	$ 22,041	$ 14,564
Increase (decrease) in valuation allowance			(4,200)
Tax expense, reduction of anticipated future benefits	2,200
Deferred Tax Asset Investment In Subsidiary [Member]
Income Tax Disclosure [Line Items]
Income Tax Expense (Benefit)			(4,200)
Increase (decrease) in valuation allowance			(4,200)
Valuation allowance	23,200		$ 23,200
Deferred Tax Asset Foreign Tax Credits [Member]
Income Tax Disclosure [Line Items]
Income Tax Expense (Benefit)	$ 1,900

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Thousands	Feb. 12, 2018	Jan. 25, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Related Party Transaction [Line Items]
Tax savings payable to TRA Holders (as a percent)	85.00%
Total TRA liability			$ 220,920		$ 220,920
Cactus LLC
Related Party Transaction [Line Items]
Distribution received from subsidiary					9,900	$ 3,800
Certain direct and indirect holders of CW Units
Related Party Transaction [Line Items]
Tax savings payable to TRA Holders (as a percent)	85.00%
Short-term rental agreement | Company owned by member of Cactus LLC
Related Party Transaction [Line Items]
Expenses under related party agreements				$ 100	200	100
Short-term rental agreement | Maximum | Cactus LLC
Related Party Transaction [Line Items]
Accounts payable to related party			100		100		$ 100
Short-term rental agreement | Maximum | Company owned by member of Cactus LLC
Related Party Transaction [Line Items]
Expenses under related party agreements			$ 100
Cactus LLC | Cactus LLC
Related Party Transaction [Line Items]
Distributions to LLC members made by subsidiary					$ 5,900	$ 5,800
Cash distribution to pre-IPO owners		$ 26,000

Employee Benefit Plans (Details

Employee Benefit Plans (Details) - 401K Plan $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019USD ($)	Sep. 30, 2018USD ($)	Sep. 30, 2019USD ($)	Sep. 30, 2018USD ($)
Defined Contribution Plan Disclosure [Line Items]
Employer match of first tier of employee contribution (as a percent)			100
First tier percentage of compensation eligible for match			3
Employer match of second tier of employee contribution (as a percent)			50
Second tier percentage of compensation eligible for match			4
Employer matching contributions	$ 0.8	$ 1	$ 2.5	$ 2.6
Employer non-elective contribution			$ 0.1

Stock-based Compensation (Detai

Stock-based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Restricted Stock Units
No. of Stock Units
Nonvested restricted stock units, beginning of period			782
Granted (in units)			204
Vested (in units)			(271)
Forfeited (in units)			(30)
Nonvested restricted stock units, end of period	685		685
Weighted Average Grant Date Fair Value
Nonvested restricted stock units, beginning of period			$ 19.84
Granted (in dollars per share)			37.37
Vested (in dollars per share)			19.35
Forfeited (in dollars per share)			22.90
Nonvested restricted stock units, end of period	$ 25.13		$ 25.13
Stock-based Compensation
Unrecognized compensation cost	$ 12.5		$ 12.5
Weighted average period over which unrecognized compensation cost is expected to be recognized			2 years 1 month 6 days
Selling, General and Administrative Expenses
Stock-based Compensation
Share-based compensation costs recognized	$ 1.7	$ 1.3	$ 5.3	$ 3.4

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Feb. 11, 2018
Numerator:
Net income attributable to Cactus Inc.				$ 34,759
Net income attributable to Cactus Inc.	$ 19,339	$ 18,672	$ 67,554
Net income attributable to non-controlling interest (1)			45,683
Net income attributable to Cactus Inc. - diluted (1)	$ 19,339	$ 18,672	$ 113,237	$ 34,759
Denominator:
Effect of dilutive shares (2)	227	408	31,077	340
Pre-tax income attributable to non-controlling interest			$ 60,100
Corporate effective interest rate, if-converted method			24.00%
Class A Common Stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Common Stock, Shares, Outstanding	47,100		47,100		37,654	0
Denominator:
Weighted average Class A Shares Outstanding - basic	47,095	35,821	44,260	30,182
Weighted average Class A Shares Outstanding - diluted (2)	47,322	36,229	75,337	30,522
Earnings per Class A Share - basic	$ 0.41	$ 0.52	$ 1.53	$ 1.15
Earnings per Class A Share - diluted (1) (2)	$ 0.41	$ 0.52	$ 1.50	$ 1.14
Class B Common Stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Common Stock, Shares, Outstanding	28,015		28,015		37,236	0
Denominator:
Effect of dilutive shares (2)			30,800
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	28,000	39,100		44,700
Restricted Stock Units
Denominator:
Effect of dilutive shares (2)			300

Supplemental Cash Flow Inform_3

Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands, shares in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018
Property and equipment acquired under finance leases		$ 2,921	$ 8,199
Property and equipment in payables		$ 4,968	$ 3,001
Class A Common Stock
Number of common stock shares issued upon redemption of CW units		9.2
Class A Common Stock | Maximum
Number of common stock shares issued upon redemption of CW units	0.1
Class B Common Stock
Economic interest of shares	$ 0	$ 0

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent event	Oct. 29, 2019$ / shares
Class A Common Stock
Subsidiary, Sale of Stock [Line Items]
Cash dividend declared	$ 0.09
Certain direct and indirect holders of CW Units
Subsidiary, Sale of Stock [Line Items]
Cash dividend declared	$ 0.09