Core Insights - Weatherford International plc has been awarded a significant contract for Managed Pressure Drilling (MPD) services for the Trion project in Mexico, enhancing its market leadership in high-performance MPD [1][2] - The contract includes MPD services for an initial 8 wells, with the potential to expand to 24 wells, indicating a strong growth opportunity in Mexico's offshore energy sector [2] - The deployment of the Victus™ intelligent MPD system is set to improve drilling safety, efficiency, and performance, showcasing Weatherford's technological advancements in the industry [3] Company Overview - Weatherford provides innovative energy services that integrate proven technologies with advanced digitalization, aiming to maximize value and return on investment for its clients [5] - The company operates in approximately 75 countries with around 17,300 team members, representing over 110 nationalities and 310 operating locations [5] Project Details - The Trion project is located in deepwater (~2,500 meters) of the Gulf of Mexico, approximately 180 kilometers east of Tamaulipas and 30 kilometers south of the US-Mexico maritime border [4] - The project is a joint venture between Woodside Petróleo Operaciones de México (60% operator) and Petróleos Mexicanos-PEMEX (40%) [4]

PART I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) The company reported decreased Q2 and H1 2025 revenue and operating income, but Q2 net income rose due to tax provisions and a business sale, with stable cash flow and improved equity Condensed Consolidated Statements of Operations Highlights (Unaudited) | (In millions, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $1,204 | $1,405 | $2,397 | $2,763 | | **Operating Income** | $237 | $264 | $379 | $497 | | **Net Income Attributable to Weatherford** | $136 | $125 | $212 | $237 | | **Diluted Income per Share** | $1.87 | $1.66 | $2.90 | $3.16 | Condensed Consolidated Balance Sheet Highlights (Unaudited) | (In millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $3,328 | $3,402 | | **Total Assets** | $5,141 | $5,159 | | **Total Current Liabilities** | $1,503 | $1,696 | | **Total Liabilities** | $3,622 | $3,876 | | **Total Shareholders' Equity** | $1,519 | $1,283 | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | (In millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $270 | $281 | | **Net Cash Used in Investing Activities** | $(36) | $(115) | | **Net Cash Used in Financing Activities** | $(230) | $(289) | - In April 2025, the company completed the sale of its pressure pumping business in Argentina for total proceeds of **$104 million**, recognizing a gain of **$70 million**[30](index=30&type=chunk) - During the first six months of 2025, the company repurchased **1.6 million** ordinary shares for **$87 million** and paid **$36 million** in dividends[51](index=51&type=chunk)[52](index=52&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management attributes Q2 2025 revenue decline to market softening and lower oil prices, impacting all segments, while maintaining a cautious near-term outlook and strong liquidity despite significant customer concentration in Mexico [Industry Trends and Outlook](index=22&type=section&id=Industry%20Trends%20and%20Outlook) The industry faces headwinds from lower oil prices and reduced rig counts, leading management to anticipate continued downward pressure on demand for the remainder of 2025 due to market softening and geopolitical uncertainty Average Commodity Prices | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Oil price - WTI ($/bbl)** | $64.63 | $81.71 | | **Oil price - Brent ($/bbl)** | $68.01 | $84.65 | Average Rig Counts | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **North America** | 699 | 738 | | **International** | 897 | 963 | | **Worldwide** | 1,596 | 1,701 | - The company anticipates continued downward pressure on demand for its services and products throughout the remainder of 2025 due to a softened market, reduced demand from a key customer in Mexico, and moderated growth in the Middle East[120](index=120&type=chunk) [Consolidated Results of Operations](index=24&type=section&id=Consolidated%20Results%20of%20Operations) Q2 2025 revenues decreased **14%** year-over-year to **$1.2 billion**, with operating income falling **10%** to **$237 million**, primarily due to Latin America's decline, partially offset by a **$70 million** business sale gain - Q2 2025 revenue decreased **14%** YoY, with product revenues down **13%** and service revenues down **15%**, seen across all segments, with DRE contributing **46%** of the decrease[82](index=82&type=chunk) - Geographically, the Q2 revenue decrease was led by Latin America, which accounted for **79%** of the decline[83](index=83&type=chunk) - A gain of **$70 million** was recognized in Q2 2025 from the sale of the pressure pumping business in Argentina[86](index=86&type=chunk) [Results of Operations by Segment](index=27&type=section&id=Results%20of%20Operations%20by%20Segment) All three segments, DRE, WCC, and PRI, experienced year-over-year declines in Q2 2025 revenue and adjusted EBITDA, with DRE most impacted by a **22%** revenue drop and **47%** EBITDA decrease, primarily due to reduced Latin American activity Segment Performance - Three Months Ended June 30 | Segment (in millions) | Revenue 2025 | Revenue 2024 | % Change | Adj. EBITDA 2025 | Adj. EBITDA 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **DRE** | $335 | $427 | (22%) | $69 | $130 | (47%) | | **WCC** | $456 | $504 | (10%) | $118 | $145 | (19%) | | **PRI** | $327 | $369 | (11%) | $63 | $85 | (26%) | - The DRE segment's revenue decline was primarily driven by Latin America, which accounted for approximately **80%** of the decrease[103](index=103&type=chunk) - The WCC segment's revenue decrease was mainly due to a decline in completions activity, with Latin America contributing about **60%** of the geographic decline[107](index=107&type=chunk) - The PRI segment's revenue decline was largely due to lower activity in intervention services and pressure pumping, with the sale of the Argentina business being a key factor, and Latin America accounting for about **70%** of the geographic revenue decrease[111](index=111&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a solid liquidity position with **$943 million** in cash, funding capital expenditures, share repurchases, debt repayments, and dividends, while noting a significant **30%** accounts receivable concentration with its largest customer in Mexico - As of June 30, 2025, cash and cash equivalents were **$943 million**, with an additional **$60 million** in restricted cash[122](index=122&type=chunk) - Primary uses of cash in the first half of 2025 included **$87 million** in share repurchases, **$73 million** in debt repayments (including **$61 million** of 2030 Senior Notes), and **$36 million** in dividends[127](index=127&type=chunk) - Net accounts receivable from Mexico represented **33%** of the company's total, with the largest customer in that country accounting for **30%** of total net outstanding accounts receivables as of June 30, 2025[135](index=135&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company reports no material changes to its market risk exposure since December 31, 2024 - There have been no material changes in the company's market risk exposure since December 31, 2024[149](index=149&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures.) The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting identified during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[151](index=151&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[152](index=152&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings.) The company is subject to various lawsuits and claims in the normal course of business, with no negative outcome considered probable for current pending litigation - The company is subject to lawsuits and claims arising from its business operations, with further details available in Note 8 of the financial statements[49](index=49&type=chunk)[155](index=155&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors.) There have been no material changes to the company's risk factors since those disclosed in its 2024 Form 10-K - As of June 30, 2025, there have been no material changes in the company's risk factors from those described in the 2024 Form 10-K[156](index=156&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company reported no unregistered equity sales, repurchasing **741,786** ordinary shares for **$33.8 million** in Q2 2025, with **$314 million** remaining authorized under its share repurchase program Issuer Repurchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - 30 | 105,162 | $44.68 | | May 1 - 31 | 555,031 | $45.80 | | June 1 - 30 | 81,593 | $44.79 | | **Total** | **741,786** | **$45.53** | - The share repurchase program, announced in July 2024, authorizes up to **$500 million** in repurchases through June 2027, with approximately **$314 million** remaining available as of June 30, 2025[158](index=158&type=chunk) [Other Information](index=38&type=section&id=Item%205.%20Other%20Information.) No director or executive officer adopted or terminated a Rule 10b5-1 trading arrangement during Q2 2025 - No director or executive officer adopted or terminated a Rule 10b5-1 trading plan during the three months ended June 30, 2025[161](index=161&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits.) This section lists exhibits filed with the Form 10-Q, including amendments to incentive plans, credit agreements, and CEO/CFO certifications - The report includes several exhibits, such as the Fourth Amended and Restated 2019 Equity Incentive Plan, the Ninth Amendment to the Credit Agreement, and CEO/CFO certifications[163](index=163&type=chunk)

Financial Data and Key Metrics Changes - The second quarter results were in line with expectations despite significant market headwinds, with adjusted EBITDA margins at 21.1%, slightly declining from Q1 [7][11] - Adjusted free cash flow was $79 million, with a free cash flow conversion rate of 31.1%, up from 26.1% in Q1 [21][24] - The company has paid four quarterly dividends of $0.25 per share and repurchased approximately $186 million worth of shares over the past four quarters [11][24] Business Line Data and Key Metrics Changes - North America and Latin America revenues were down sequentially, with North America affected by seasonal spring breakup in Canada and Latin America impacted by Argentina divestitures [9][10] - The ESSR region saw growth due to project startups in Europe, while the Middle East and North Africa region showed noteworthy performance despite a softening market in Saudi Arabia [10][12] - The company expects a decline in revenues for 2025, with North America projected to decline by high single digits and international revenues expected to decline low double to mid double digits [19][28] Market Data and Key Metrics Changes - The overall international market has softened, with increased caution and a slowdown in customer spending due to stable commodity prices and trade discussions causing uncertainty [14][15] - The rig count in Saudi Arabia has declined, affecting the market dynamics, but the company believes it remains underpenetrated in several businesses [36][37] - The U.S. Land market has been challenging, with pricing pressure noted, particularly in the service-related segments [82] Company Strategy and Development Direction - The company is focused on defending margins and maximizing cash generation while adapting to evolving market conditions [29][31] - A multiyear cost optimization program is in place to achieve sustainable productivity gains through technology and lean processes [31] - The company is exploring M&A opportunities, particularly in well construction and production segments, with a focus on value creation through cash flow accretion [73][75] Management's Comments on Operating Environment and Future Outlook - Management anticipates market headwinds will persist for at least another twelve months, with a potential recovery not expected until the second half of 2026 [16][39] - The company has reduced headcount by over 1,500 and lowered annualized personnel expenses by more than $125 million since 2024 [17][18] - Despite challenges, management remains optimistic about the company's future, emphasizing a strong balance sheet and commitment to shareholder returns [30][31] Other Important Information - The company has approximately $1 billion in cash and restricted cash, with total liquidity at $1.3 billion, the highest level since emergence [25][92] - Capital expenditures were $54 million in Q2, down from $77 million in Q1, with expectations for further declines [24][28] - The company is committed to maintaining net working capital efficiency levels at 25% or better [21] Q&A Session Summary Question: Insights on Saudi Arabia's market transition - Management acknowledged the softness in the Saudi market but highlighted the company's underpenetration in several businesses and strong execution [36][37] Question: Clarification on Q4 guidance - Management indicated that the Q4 guidance includes expected seasonal sales and project startups, despite uncertainties due to tariffs [44][46] Question: U.S. Land market challenges - Management noted a steady decline in U.S. Land, with a focus on production products and the impact of tariffs on future performance [51][55] Question: Stability in Mexico's market - Management expressed cautious optimism about stability in Mexico, with expectations for a ramp in activity levels in the second half of the year [60][66] Question: M&A opportunities and balance sheet strategy - Management confirmed a robust pipeline for M&A opportunities, focusing on strategic fits that create value, while maintaining a strong balance sheet [73][75] Question: Pricing pressure in various regions - Management identified North America as experiencing significant pricing pressure, particularly in service businesses, while remaining focused on maintaining margins [82]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA margins for Q2 at 21.1%, slightly declining relative to Q1 [9] - Adjusted free cash flow was $79 million in Q2, with a free cash flow conversion rate of 31.1%, up from 26.1% in Q1 [20] - The company has paid four quarterly dividends of $0.25 per share and repurchased approximately $186 million worth of shares over the past four quarters [10] Business Line Data and Key Metrics Changes - North America and Latin America revenues were down sequentially, with North America affected by seasonal spring breakup in Canada and Latin America impacted by Argentina divestitures [7] - The ESSR region saw growth due to project startups in Europe, further amplified by foreign exchange [8] - The company expects a decline in international revenues by low double to mid double digits for 2025, adjusting for Mexico activity declines and Argentina divestitures [17] Market Data and Key Metrics Changes - The overall international market has softened over the past year, with expectations of continued pressure into 2026 [13] - The Kingdom of Saudi Arabia market has softened, with a decline in rig count affecting performance [36] - The company anticipates sluggish activity levels in 2025 and 2026 due to global trade reductions and increased supply [15] Company Strategy and Development Direction - The company is focused on defending margins and maximizing cash generation while adapting to evolving market conditions [29] - A multiyear cost optimization program is in place to achieve sustainable productivity gains through technology and lean processes [31] - The company is exploring M&A opportunities, particularly in well construction and production segments, with a focus on value creation [73] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate market disruptions, citing a strong balance sheet and liquidity of $1.3 billion [30] - The company expects continued market headwinds for at least another twelve months, with a potential recovery in the second half of 2026 [15] - Management remains hopeful for a slight uptick in Q4 but acknowledges the broader slowdown [25] Other Important Information - The company has reduced its headcount by over 1,500 and lowered annualized personnel expenses by more than $125 million since 2024 [16] - Capital expenditures (CapEx) were $54 million in Q2, down from $77 million in Q1, with expectations for further declines [23] - The company has a net leverage ratio of less than 0.5 times and approximately $1 billion in cash and restricted cash [24] Q&A Session Summary Question: Insights on Saudi Arabia's market transition - Management noted a steady decline in rig count and emphasized the importance of technology introduction and strong execution to drive performance [36][38] Question: Clarification on Q4 guidance - Management explained that the Q4 guidance includes expected seasonal sales and project startups, although year-end sales may be muted due to uncertainty [46][47] Question: U.S. Land market challenges - Management acknowledged a steady decline in U.S. Land, primarily driven by tariff impacts, and emphasized a focus on defending margins [52][54] Question: Stability in Mexico's market - Management expressed cautious optimism about stability in Mexico, with expectations for a ramp in activity levels in the second half of the year [63][66] Question: M&A opportunities and balance sheet strategy - Management highlighted a robust pipeline for M&A opportunities, focusing on strategic fits that create value through cash flow accretion [73][75]

Q2'25 Financial Performance - Weatherford's Q2'25 revenue reached $1,204 million, a 1% sequential increase[7] - Adjusted EBITDA* was $254 million, with a margin of 21.1%[7] - Adjusted Free Cash Flow* stood at $79 million, representing a 31.1% conversion on Adjusted EBITDA*[7] - Net income was $136 million, resulting in basic earnings per share of $1.87[11] Segment Performance - Drilling & Evaluation (DRE) revenue was $335 million, a 4% sequential decrease and a 22% year-over-year decrease[66] - Well Construction & Completions (WCC) revenue reached $456 million, a 3% sequential increase but a 10% year-over-year decrease[70] - Production & Intervention (PRI) revenue was $327 million, a 2% sequential decrease and an 11% year-over-year decrease[73] Capital Allocation and Balance Sheet - Weatherford repurchased $27 million of 8.625% Senior Notes due 2030 in Q2'25[8] - Shareholder return in Q2'25 totaled $52 million, including $18 million in dividends and $34 million in share repurchases[10] - The company maintains a strong liquidity position with ~$1 billion in cash and restricted cash[14] - Net leverage* is at 0.49x[11] Outlook - The company projects Q3'25 revenues between $1,165 million and $1,195 million and Adjusted EBITDA* between $245 million and $265 million[84] - For the full year 2025, Weatherford anticipates revenues of $47 billion to $49 billion and Adjusted EBITDA* of $1015 billion to $1060 billion[84]

Core Viewpoint - Weatherford (WFRD) reported quarterly earnings of $1.87 per share, significantly exceeding the Zacks Consensus Estimate of $0.97 per share, marking an earnings surprise of +92.78% [1][2] Financial Performance - The company achieved revenues of $1.2 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.94%, although this represents a decline from year-ago revenues of $1.41 billion [2] - Over the last four quarters, Weatherford has consistently surpassed consensus EPS estimates, achieving this four times [2] Stock Performance - Weatherford shares have declined approximately 25.4% since the beginning of the year, contrasting with the S&P 500's gain of 7.2% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.44 on revenues of $1.22 billion, and for the current fiscal year, it is $4.90 on revenues of $4.82 billion [7] - The trend of estimate revisions for Weatherford was unfavorable prior to the earnings release, which may impact future stock movements [6] Industry Context - The Oil and Gas - Field Services industry, to which Weatherford belongs, is currently ranked in the bottom 5% of over 250 Zacks industries, suggesting a challenging environment for stock performance [8]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Q2 2025 revenue was $1,204 million (up 1% sequentially), with profitability improving and $79 million adjusted free cash flow Q2 2025 Key Financial Metrics | Metric | Q2 2025 ($M) | Sequential Change | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $1,204 M | +1% | -14% | | Operating Income | $237 M | +67% | -10% | | Net Income | $136 M | +79% | +9% | | Adjusted EBITDA* | $254 M | Flat | -30% | | Adjusted EBITDA Margin* | 21.1% | -11 bps | -488 bps | | Diluted EPS | $1.87 | +81% | +13% | | Cash from Operations | $128 M | -10% | -15% | | Adjusted Free Cash Flow* | $79 M | +20% | -18% | - The company returned **$52 million** to shareholders during the quarter, consisting of **$18 million** in dividends and **$34 million** in share repurchases[2](index=2&type=chunk) - A strategic agreement was signed with Amazon Web Services (AWS) to migrate and modernize digital platforms, aiming to enhance operational efficiency and scale cloud-based solutions[2](index=2&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management noted market slowdowns but highlighted resilient sequential performance and a focus on free cash flow - Management cited market headwinds from geopolitical events, supply-demand imbalance concerns, and trade uncertainties, leading to an activity slowdown[6](index=6&type=chunk) - The company's performance is described as resilient, with revenue and adjusted free cash flow increasing sequentially despite the divestiture of businesses in Argentina and payment delays in Mexico[6](index=6&type=chunk) - The forward-looking outlook anticipates a relatively flat revenue trajectory, with a strategic focus on driving adjusted free cash flow through portfolio optimization, cost efficiencies, and working capital management[7](index=7&type=chunk) [Business & Operational Review](index=3&type=section&id=Business%20%26%20Operational%20Review) [Operational & Commercial Highlights](index=3&type=section&id=Operational%20%26%20Commercial%20Highlights) The company secured multiple key contracts and extensions globally, demonstrating strong commercial momentum - Secured a three-year Managed Pressure Drilling (MPD) services contract with an IOC for a deepwater project in Mexico[9](index=9&type=chunk) - Awarded a one-year contract extension by Aramco for MPD services on its onshore and offshore wells[9](index=9&type=chunk) - Won a three-year contract with Petrobras to supply conventional completions equipment for pre-salt and post-salt fields in offshore Brazil[9](index=9&type=chunk) - Received multiple contracts from major operators like bp, Shell, Beach Energy, and Kuwait Oil Company for a wide range of services including Completions, Drilling Services, and Tubular Running Services (TRS)[9](index=9&type=chunk) [Technology Highlights](index=4&type=section&id=Technology%20Highlights) Successful deployments of advanced technologies across all segments improved efficiency, safety, and global adoption - **Drilling & Evaluation (DRE):** Successfully deployed combined Magnus™ and Victus™ solutions in Kuwait and completed the first Modus™ job using MPD techniques in Qatar, saving significant rig time[10](index=10&type=chunk) - **Well Construction and Completions (WCC):** Integrated multiple Tubular Running Services (TRS) technologies for bp in the Gulf of America, which improved operational speed, cost-effectiveness, and safety[10](index=10&type=chunk) - **Production and Intervention (PRI):** Witnessed continued global adoption of Rotaflex® Artificial Lift technology and completed a successful field trial of TITAN RS casing recovery technology for Equinor in Norway[10](index=10&type=chunk) [Shareholder Return](index=5&type=section&id=Shareholder%20Return) Weatherford returned $52 million to shareholders in Q2 2025 and declared a $0.25 quarterly cash dividend Shareholder Return Summary | Period | Dividends Paid ($M) | Share Repurchases ($M) | Total Return ($M) | | :--- | :--- | :--- | :--- | | Q2 2025 | $18 M | $34 M | $52 M | | H1 2025 | $36 M | $87 M | $123 M | - The Board of Directors declared a quarterly cash dividend of **$0.25 per share**, payable on September 4, 2025[12](index=12&type=chunk) [Segment & Geographic Performance](index=5&type=section&id=Segment%20%26%20Geographic%20Performance) [Results by Reportable Segment](index=5&type=section&id=Results%20by%20Reportable%20Segment) Segment performance was mixed, with WCC growing sequentially while DRE and PRI declined, and all segments down YoY [Drilling and Evaluation (DRE)](index=5&type=section&id=Drilling%20and%20Evaluation%20(DRE)) DRE revenue decreased 4% sequentially to $335 million, driven by lower Wireline activity, with EBITDA also declining DRE Financial Performance (Q2 2025) | Metric | Amount ($M) | Sequential Change | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $335 M | -4% | -22% | | Segment Adj. EBITDA | $69 M | -7% | -47% | | Segment Adj. EBITDA Margin | 20.6% | -55 bps | -985 bps | - The sequential revenue decrease was mainly due to lower Wireline activity in North America and Latin America, partially offset by higher Drilling Services activity in Europe/Sub-Sahara Africa/Russia and Latin America[13](index=13&type=chunk) [Well Construction and Completions (WCC)](index=5&type=section&id=Well%20Construction%20and%20Completions%20(WCC)) WCC revenue grew 3% sequentially to $456 million, driven by Liner Hangers and Cementation, but EBITDA declined WCC Financial Performance (Q2 2025) | Metric | Amount ($M) | Sequential Change | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $456 M | +3% | -10% | | Segment Adj. EBITDA | $118 M | -8% | -19% | | Segment Adj. EBITDA Margin | 25.9% | -315 bps | -289 bps | - Sequential revenue growth was driven by higher Liner Hangers and Cementation Products activity, which was partly offset by lower Completions activity, especially in Latin America[15](index=15&type=chunk) [Production and Intervention (PRI)](index=6&type=section&id=Production%20and%20Intervention%20(PRI)) PRI revenue decreased 2% sequentially to $327 million due to a divestiture, but adjusted EBITDA improved PRI Financial Performance (Q2 2025) | Metric | Amount ($M) | Sequential Change | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $327 M | -2% | -11% | | Segment Adj. EBITDA | $63 M | +2% | -26% | | Segment Adj. EBITDA Margin | 19.3% | +70 bps | -377 bps | - The sequential revenue decline was mainly from lower Pressure Pumping activity following the sale of the Argentina business, partly offset by higher Artificial Lift and Sub-sea Intervention activity[17](index=17&type=chunk) [Revenue by Geography](index=6&type=section&id=Revenue%20by%20Geography) International revenue grew 2% sequentially, driven by Europe and Middle East, offset by Latin America's decline Q2 2025 Revenue by Geography ($ in Millions) | Region | Q2 2025 Revenue | Sequential Change | YoY Change | | :--- | :--- | :--- | :--- | | North America | $241 | -4% | -4% | | **International** | **$963** | **+2%** | **-16%** | | Latin America | $195 | -19% | -45% | | Middle East/North Africa/Asia | $524 | +4% | -3% | | Europe/Sub-Sahara Africa/Russia | $244 | +23% | -5% | | **Total Revenue** | **$1,204** | **+1%** | **-14%** | [North America](index=7&type=section&id=North%20America) North America revenue decreased 4% sequentially to $241 million, primarily due to lower Wireline activity - The 4% sequential revenue decrease was primarily from lower Wireline activity in Canada Land[20](index=20&type=chunk) [International](index=7&type=section&id=International) International revenue increased 2% sequentially to $963 million, driven by Europe and Middle East, despite Latin America's decline - Latin America revenue decreased 19% sequentially, mainly due to lower activity in Argentina following the sale of the Pressure Pumping business[22](index=22&type=chunk) - Middle East/North Africa/Asia revenue grew 4% sequentially, driven by higher Liner Hangers and Cementation Products activity[23](index=23&type=chunk) - Europe/Sub-Sahara Africa/Russia revenue saw a strong sequential increase of 23%, driven by higher activity across all segments[24](index=24&type=chunk) [Financial Statements](index=10&type=section&id=Financial%20Statements) [Selected Statements of Operations (Unaudited)](index=10&type=section&id=Selected%20Statements%20of%20Operations%20(Unaudited)) Q2 2025 total revenues were $1,204 million, with operating income of $237 million and net income of $136 million Q2 2025 Statement of Operations Highlights ($ in Millions) | Line Item | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Total Revenues | 1,204 | 1,193 | 1,405 | | Gain on Sale of Business | 70 | — | — | | Operating Income | 237 | 142 | 264 | | Net Income Attributable to Weatherford | 136 | 76 | 125 | | Diluted Income Per Share | $1.87 | $1.03 | $1.66 | [Selected Balance Sheet Data (Unaudited)](index=11&type=section&id=Selected%20Balance%20Sheet%20Data%20(Unaudited)) As of June 30, 2025, cash was $943 million, long-term debt $1,565 million, and shareholders' equity increased Balance Sheet Highlights ($ in Millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 943 | 916 | | Accounts Receivable, Net | 1,177 | 1,261 | | Long-term Debt | 1,565 | 1,617 | | Total Shareholders' Equity | 1,519 | 1,283 | [Selected Cash Flows Information (Unaudited)](index=12&type=section&id=Selected%20Cash%20Flows%20Information%20(Unaudited)) Q2 2025 net cash from operations was $128 million, with investing providing $43 million and financing using $97 million Q2 2025 Cash Flow Summary ($ in Millions) | Cash Flow Activity | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Cash Provided By Operating Activities | 128 | 142 | 150 | | Net Cash Provided by (Used In) Investing Activities | 43 | (79) | (61) | | Net Cash Used In Financing Activities | (97) | (133) | (102) | [Non-GAAP Financial Measures](index=13&type=section&id=Non-GAAP%20Financial%20Measures) [Definitions of Non-GAAP Measures](index=13&type=section&id=Definitions%20of%20Non-GAAP%20Measures) This section defines key non-GAAP measures like Adjusted EBITDA, Adjusted Free Cash Flow, Net Debt, and Net Leverage - **Adjusted EBITDA:** Defined as consolidated income before interest, taxes, depreciation, amortization, and excludes items like restructuring charges and share-based compensation. Management believes it is useful for assessing normalized operating performance[41](index=41&type=chunk) - **Adjusted Free Cash Flow:** Defined as cash from operating activities, less capital expenditures, plus proceeds from asset dispositions. Management uses this to measure cash generation and capital discipline[43](index=43&type=chunk) - **Net Debt & Net Leverage:** Net Debt is total debt less cash and restricted cash. Net Leverage is Net Debt divided by trailing 12-month Adjusted EBITDA. These are used to assess the company's ability to service its debt[44](index=44&type=chunk)[45](index=45&type=chunk) [GAAP to Non-GAAP Reconciliation](index=15&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) Detailed reconciliations show Q2 2025 Net Income reconciled to Adjusted EBITDA, and Net Cash to Adjusted Free Cash Flow Reconciliation of Net Income to Adjusted EBITDA (Q2 2025, $ in Millions) | Description | Amount | | :--- | :--- | | Net Income Attributable to Weatherford | $136 | | Add back: Noncontrolling Interests, Taxes, Interest, etc. | $80 | | Operating Income | $237 | | Add back: D&A, Restructuring, Share-Based Comp, etc. | $87 | | Less: Gain on Sale of Business | ($70) | | **Adjusted EBITDA*** | **$254** | Reconciliation to Adjusted Free Cash Flow (Q2 2025, $ in Millions) | Description | Amount | | :--- | :--- | | Net Cash Provided By Operating Activities | $128 | | Capital Expenditures | ($54) | | Proceeds from Disposition of Assets | $5 | | **Adjusted Free Cash Flow*** | **$79** | Net Debt and Leverage Calculation (June 30, 2025) | Metric | Amount ($M) | | :--- | :--- | | Total Debt | $1,591 M | | Less: Total Cash | ($1,003 M) | | **Net Debt*** | **$588 M** | | Trailing 12-month Adjusted EBITDA* | $1,188 M | | **Net Leverage*** | **0.49x** |

Core Viewpoint - Weatherford International plc reported its second quarter 2025 financial results, showing a mixed performance with sequential improvements in several metrics but declines year-over-year due to market challenges and geopolitical factors. Financial Performance - Revenues for Q2 2025 were $1,204 million, a 1% increase sequentially but a 14% decrease year-over-year [2] - Operating income was $237 million, up 67% sequentially but down 10% year-over-year [2] - Net income reached $136 million with an 11.3% margin, reflecting a 79% sequential increase and a 9% year-over-year increase [2] - Adjusted EBITDA was $254 million, flat sequentially and down 30% year-over-year, with a margin of 21.1% [2] - Basic and diluted income per share were both $1.87, marking an 81% sequential increase and a 10% year-over-year increase [2] Cash Flow and Capital Expenditures - Cash flows from operating activities were $128 million, down 10% sequentially and 15% year-over-year [3] - Adjusted free cash flow was $79 million, a 20% sequential increase but an 18% year-over-year decrease [3] - Capital expenditures totaled $54 million, down 30% sequentially and 13% year-over-year [3] Operational Insights - The company faced a slowdown in core operating markets due to geopolitical events and supply-demand imbalances, yet managed to deliver results in line with expectations [4] - The sequential performance indicated strong fundamentals and operational efficiency despite market softness [4] - The company emphasized its focus on driving adjusted free cash flow conversion through portfolio optimization and cost efficiencies [5] Segment Performance - Drilling and Evaluation (DRE) segment revenue was $335 million, down 4% sequentially and 22% year-over-year [12] - Well Construction and Completions (WCC) segment revenue was $456 million, up 3% sequentially but down 10% year-over-year [14] - Production and Intervention (PRI) segment revenue was $327 million, down 2% sequentially and 11% year-over-year [18] Geographic Revenue Breakdown - North America revenue was $241 million, down 4% sequentially and year-over-year [21] - International revenue was $963 million, up 2% sequentially but down 16% year-over-year [22] - Latin America revenue decreased by 19% sequentially and 45% year-over-year to $195 million [23] - Middle East/North Africa/Asia revenue increased by 4% sequentially but decreased by 3% year-over-year to $524 million [24] - Europe/Sub-Sahara Africa/Russia revenue increased by 23% sequentially but decreased by 5% year-over-year to $244 million [25] Shareholder Returns - The company returned $52 million to shareholders in Q2 2025, including $18 million in dividends and $34 million in share repurchases [10] - A quarterly cash dividend of $0.25 per share was declared, payable on September 4, 2025 [11]

Core Insights - Weatherford International (NASDAQ: WFRD) is in a paradoxical position with solid fundamentals after years of restructuring [1] - The company has refocused its portfolio on high value-added services, demonstrating stable operating profitability and regular cash generation [1] - Financial leverage has improved, indicating a stronger financial position [1] Investment Approach - The investment approach combines macroeconomic analysis with valuation models, focusing on financial structure, free cash flow generation, and capital allocation discipline [1] - There is a particular interest in companies undergoing transformation or recovery, where the risk/reward profile is favorable over a 2–3 year horizon [1] - The aim is to publish in-depth investment theses on undervalued equities and special situation plays that may not be widely recognized by investors [1]

Group 1 - The company fulfills 3 out of 3 quality indicators and 0 out of 2 valuation indicators, resulting in a rating of 3/5 stars, which is typically insufficient for a strong investment thesis [2] - A valuation target of €140/share is established, indicating an attractive risk/reward-adjusted upside [2] - The company receives a "Hold" rating as of July 2025 based on the analysis [2] Group 2 - The company fulfills 3 out of 3 quality indicators and 1 out of 2 valuation indicators, leading to a rating of 4/5 stars, which supports a more favorable investment thesis [2] - A valuation target of €140/share is reiterated, suggesting a compelling risk/reward-adjusted upside [2] - The company is given a "Buy" rating as of July 2025 based on the improved indicators [2]