Weatherford International(WFRD) - 2025 Q2 - Quarterly Results

Financial Performance Overview Q2 2025 Financial Highlights 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] - 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] Management Commentary 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] - 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] - 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] Business & Operational Review Operational & Commercial Highlights 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] - Awarded a one-year contract extension by Aramco for MPD services on its onshore and offshore wells[9] - Won a three-year contract with Petrobras to supply conventional completions equipment for pre-salt and post-salt fields in offshore Brazil[9] - 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] Technology Highlights 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] - 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] - 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] Shareholder Return 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] Segment & Geographic Performance Results by Reportable Segment Segment performance was mixed, with WCC growing sequentially while DRE and PRI declined, and all segments down YoY Drilling and Evaluation (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] Well Construction and Completions (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] Production and Intervention (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 | $63 M | +2% | -26% | | Segment Adj. EBITDA Margin | 19.3% | +70 bps | -377 bps | - The sequential revenue decline was mainly from lower Pressure Pumping activity following the sale of the Argentina business, partly offset by higher Artificial Lift and Sub-sea Intervention activity[17] Revenue by Geography International revenue grew 2% sequentially, driven by Europe and Middle East, offset by Latin America's decline Q2 2025 Revenue by Geography ($ 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 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] 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] - Middle East/North Africa/Asia revenue grew 4% sequentially, driven by higher Liner Hangers and Cementation Products activity[23] - Europe/Sub-Sahara Africa/Russia revenue saw a strong sequential increase of 23%, driven by higher activity across all segments[24] Financial Statements Selected Statements of Operations (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) 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) 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 Definitions of Non-GAAP Measures 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] - 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] - 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][45] GAAP to Non-GAAP Reconciliation 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 |