Core Insights - The stock market is reaching new all-time highs, resulting in valuations that exceed historical averages [1] - A shift towards short-term bonds is being considered for diversification in the current investment climate [1] - The focus is on identifying undervalued companies with strong earnings and significant margins of safety [1] Company and Investment Strategy - The investment approach is global, targeting companies that are well understood and assessed for future growth potential [1] - Companies with a solid earnings track record trading at less than 8 times free cash flow are particularly appealing [1]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2025 was $108 million, exceeding expectations, driven by strong drilling activity in Canada and improved activity in the U.S. [4][5] - Revenue decreased by 5% year-over-year to $407 million, while net earnings were $60 million or $1.21 per share, marking the twelfth consecutive quarter of positive earnings [5][11] - Funds from operations were $104 million, and cash provided by operations was $147 million [5][11] Business Line Data and Key Metrics Changes - In the U.S., drilling activity averaged 33 rigs in Q2, an increase of three rigs from the previous quarter, with operating days up 13% [6][7] - Daily operating margins in the U.S. were $9,026, an increase of $666 from Q1, exceeding guidance [6] - In Canada, drilling activity averaged 50 rigs, with daily operating margins of $15,306, up $883 from Q2 2024 [8] - The Completion and Production Services segment saw adjusted EBITDA of $10 million, down 18% year-over-year due to a 23% decrease in well service hours [9] Market Data and Key Metrics Changes - Internationally, drilling activity averaged seven rigs, with average day rates increasing by 4% year-over-year to $53,129 [8] - The overall market for oil and gas has seen increased prices, with rig counts stable or up in key basins like Haynesville and Marcellus [11] Company Strategy and Development Direction - The company plans to increase its capital expenditures for 2025 from $200 million to $240 million, focusing on sustaining infrastructure and upgrades [9][12] - Precision Drilling aims to reduce debt by $700 million between 2022 and 2027, having already reduced $525 million [13] - The company is focusing on maximizing free cash flow and has implemented cost reduction plans to manage expenses effectively [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about customer demand for gas-directed drilling, with expectations of increased rig activity in the U.S. [14][15] - The outlook for the remainder of 2025 has improved significantly, with strong customer demand for rig upgrades and term contracts [14][15] - Management noted that while macro uncertainties persist, the company is well-positioned to capitalize on market opportunities [14][15] Other Important Information - The company has a strong liquidity position of approximately $530 million, with a net debt to trailing twelve-month EBITDA ratio of 1.3 times [11] - The company is committed to reducing its debt and returning capital to shareholders through share repurchases [12][13] Q&A Session Summary Question: Growth in the U.S. Market - Management noted that the growth in gas-based work is primarily driven by private companies, with expectations to increase rig counts to 40-45 over time [38][40] Question: Canadian Market Dynamics - Management discussed the oversupply in the double rig segment and the need for consolidation among service providers to improve pricing discipline [42][45] Question: Contract Durations and Upgrades - Management clarified that most rig upgrades do not require long-term contracts to recoup costs, with many upgrades expected to generate returns within six months to a year [52][54] Question: Future Rig Capabilities - Management indicated that upgraded rigs will reach peak capabilities, allowing for efficient drilling of longer laterals in key basins [70][73] Question: Customer Interest in Electrification - There is currently limited interest from Canadian operators in electrifying service rigs, although there is some interest in high-line power drilling rigs [81] Question: Breakdown of Rig Upgrades - The majority of the 22 rig upgrades are targeted in the Haynesville, Marcellus, Montney, and Canadian heavy oil basins [86]

Financial Data and Key Metrics Changes - For Q2 2025, net income was $180 million compared to $161 million in Q1 2025, and adjusted EBITDA increased to $316 million from $292 million in Q1 2025 [16][18] - Adjusted EBITDA margin for Q2 was maintained at approximately 80%, above the target of 75%, indicating strong operating leverage [17] - The company expects adjusted free cash flow of approximately $725 million to $775 million for the full year 2025, with capital expenditures projected at $300 million [10][19] Business Line Data and Key Metrics Changes - In Q2 2025, throughput volumes averaged 449 million cubic feet per day for gas processing, 137,000 barrels per day for crude terminaling, and 138,000 barrels per day for water gathering, with gas processing and oil terminaling volumes increasing by approximately 6% and 10% respectively from Q1 2025 [12][13] - Gathering revenues increased by approximately $16 million, processing revenues by $9 million, and terminaling revenues by $4 million compared to Q1 2025 [17] Market Data and Key Metrics Changes - The company is reaffirming its full-year 2025 oil and gas throughput guidance, expecting volume growth in Q3 2025, partially offset by higher seasonal maintenance activity [13] - The North Dakota Pipeline Authority anticipates that Bakken gas will grow over the long term, with oil remaining relatively flat [32] Company Strategy and Development Direction - The company aims to continue delivering operational excellence and financial performance, with a focus on a disciplined, low-risk investment strategy to meet basin demand while maintaining reliable operations [14] - The financial strategy prioritizes return of capital to shareholders, with a targeted annual distribution growth of at least 5% through 2027 [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance and growth trajectory, with expectations of approximately 10% volume growth across all oil and gas systems in 2025 compared to 2024 [9] - The company highlighted the importance of the partnership with Chevron to optimize the Bakken development, maintaining a focus on high utilization of infrastructure [60][61] Other Important Information - Hess Midstream's senior unsecured debt was upgraded to an investment grade rating of BBB- following the Chevron merger [10] - The company has returned over $2 billion to shareholders through repurchases since 2021 and increased distributions per Class A share by more than 60% [10] Q&A Session Summary Question: Insights on Chevron's view on Bakken and rig count changes - Management indicated that they are currently running four rigs and have seen strong upstream performance, with updates to the development plan expected towards the end of the year [22][24] Question: Capital allocation and appetite for buybacks - Management confirmed that they expect to continue repurchases at a rate of approximately $100 million per quarter, maintaining their financial flexibility of $1.25 billion through 2027 [25][26] Question: Trends in Gas-to-Oil Ratios (GORs) and Bakken outlook - Management noted that GORs are expected to increase over the long term, with Bakken gas anticipated to grow, while oil production remains stable [31][32] Question: Guidance and performance expectations - Management expressed confidence in maintaining guidance, with expectations of higher EBITDA in the second half of the year despite some seasonal maintenance costs [41][42] Question: Governance structure post-GIP exit - Management emphasized the importance of balanced governance and the implementation of mechanisms requiring independent director approval for key decisions [52][53] Question: Chevron's involvement in buybacks - Management clarified that there would be no change in the buyback strategy, with participation expected to align with public ownership levels [45][46]

Financial Data and Key Metrics Changes - Adjusted EBITDA for the second quarter totaled $248 million, reflecting a sequential increase driven by the Parker operations and improved U.S. drilling results [5][51] - Revenue from operations increased to $833 million, up 13% from the previous quarter, primarily due to the full quarter impact of the Parker acquisition [46] - Adjusted free cash flow improved to $41 million from a negative $61 million in the first quarter, driven by lower cash interest paid and contributions from Parker [60] Business Line Data and Key Metrics Changes - U.S. drilling revenue was $255 million, an 11% increase sequentially, supported by stronger organic activity and contributions from Parker [47] - International drilling segment revenue increased by 1% to $385 million, primarily due to Parker's contribution, despite rig count reductions in legacy operations [50] - Drilling Solutions revenue surged by 82.7% to $170.3 million, largely attributed to the full quarter impact of Parker Wellbore [50] Market Data and Key Metrics Changes - The Lower 48 average rig count increased by nearly two rigs to 62.4, with a current count of 60 rigs operating [48][54] - The international rig count increased slightly from 85 to 85.9 rigs, driven by new builds in Saudi Arabia and reactivated rigs in Kuwait [50][43] - The Baker Hughes weekly Lower 48 rig count declined by 7% from March to June, indicating a shift towards larger operators [20] Company Strategy and Development Direction - The company is focused on integrating Parker Wellbore to unlock additional benefits and achieve $40 million in cost synergies by the end of 2025 [44][5] - The strategic shift in Saudi Arabia from oil to natural gas drilling is noted, with a significant number of land rigs idled and new builds focused on gas basins [13][14] - The company aims to maintain operational expense control and align capital expenditures with activity levels in response to market conditions [32][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the global oil market and the resilience of natural gas demand, particularly driven by LNG exports [7][8] - The outlook for the third quarter indicates some pressure on pricing, with expectations for Lower 48 daily margins to decline to approximately $13,300 [55] - Management remains cautious about the U.S. Lower 48 drilling activity, particularly in oil basins, while anticipating continued recovery in natural gas drilling [41][42] Other Important Information - The company repurchased approximately $14 million in notes at a significant discount during the second quarter, emphasizing a priority on debt reduction [36] - Capital expenditures for the second quarter totaled $199 million, with expectations for 2025 capital expenditures to be between $700 million and $710 million, lower than previously communicated [62] - The transition of CFO William Restrepo is noted, with Miguel Rodriguez set to take over, highlighting the leadership continuity within the company [66] Q&A Session Summary Question: Growth prospects of new build rigs in Saudi Arabia - Management indicated that the fleet is well-suited for opportunities in the region, with potential for redeployment to other Middle Eastern countries if needed [76][78] Question: Clarification on adjusted free cash flow guidance - Management explained that while there are reductions in CapEx, the overall impact on cash flow is about $50 million, with adjustments made for various market uncertainties [79][80] Question: Risks to Nabors' legacy rigs in Saudi Arabia - Management noted that while some rigs have been idled, the company is well-positioned due to its relationship with Aramco and the focus on gas drilling [86][88] Question: Future of Lower 48 daily drilling costs - Management is focused on optimizing operations and believes there is stability in costs, with no significant inflation expected [112][114] Question: Collections in Mexico - Management highlighted ongoing negotiations with Pemex and the expectation of substantial collections in the third quarter due to government initiatives [106][107]

Financial Performance - Value-added (VA) sales reached $269 million, a 2% organic decrease year-over-year[9] - Adjusted EBITDA margin was a record 20.8% of VA, amounting to $55.8 million[9] - Adjusted EPS was $1.37, a 21% sequential increase[9] - Approximately $36 million in free cash flow was generated[9] - The company is on track to deliver 70%+ free cash flow conversion for the full year[9] Segment Performance - Performance Materials' value-added sales were $168.5 million[35] with adjusted EBITDA of $41.5 million, or 24.6% of VA[36] - Electronic Materials' value-added sales were $76.1 million[42] with adjusted EBITDA of $17.8 million, up 4% year-over-year[42], achieving a record adjusted EBITDA margin of 23.4%, up 230 bps year-over-year[20, 44] - Precision Optics' value-added sales were $24.4 million[47] with adjusted EBITDA of $2.2 million, up 5%[47], and adjusted EBITDA margins up 950 bps sequentially[20] Capital Allocation and Outlook - 100,000 shares were repurchased during the quarter at an average of ~$78/share[10, 20] - Full year adjusted EPS guidance of $5.30 - $5.70 is affirmed[20, 54] - Capital expenditures are projected at $70 million for 2025[56]

Core Insights - The Timken Company reported second-quarter 2025 net sales of $1.17 billion, a decrease of 0.8% compared to the same period in 2024, primarily due to lower end-market demand, although partially offset by revenue from the CGI acquisition and favorable pricing [1][12] - The company's net income for the quarter was $78.5 million, or $1.12 per diluted share, down from $96.2 million, or $1.36 per diluted share, in the same quarter last year [2][12] - Adjusted EBITDA for the quarter was $208.2 million, representing 17.7% of sales, compared to $230.2 million, or 19.5% of sales, in the prior year [3][12] Financial Performance - Net income margin decreased to 6.7% from 8.1% year-over-year, while adjusted EPS fell to $1.42 from $1.63, reflecting a 12.9% decline [2][3] - The company generated $111.3 million in net cash from operations and reported free cash flow of $78.2 million [4][12] - Timken returned $47.0 million to shareholders through dividends and share repurchases during the quarter, with a 3% increase in quarterly dividends [4][12] Segment Performance - Engineered Bearings segment sales were $777.4 million, down 0.8% year-over-year, with higher renewable energy demand offset by lower demand in other sectors [5][12] - Industrial Motion segment sales decreased by 0.7% to $396.0 million, with lower demand across most platforms despite contributions from the CGI acquisition [7][12] - Adjusted EBITDA margins for Engineered Bearings and Industrial Motion were 19.7% and 18.3%, respectively, both showing declines from the previous year [6][8] Outlook - The company has revised its full-year 2025 earnings per diluted share forecast to a range of $3.90 to $4.20, with adjusted earnings per diluted share expected to be between $5.10 and $5.40 [9][12] - Timken anticipates a challenging operating environment in the second half of 2025, driven by trade situations and macroeconomic factors [10][12] - Despite current challenges, the company expresses optimism for 2026, planning to position itself for potential industrial market expansion [10][12]

Financial Performance - H1 2025 revenue reached €3677 million, a 70% increase at constant currency (cc)[14] - H1 2025 adjusted EBITDA was €876 million, up 127% cc[14] - Free cash flow pre-M&A for H1 2025 was -€14 million, an improvement of €182 million compared to H1 2024[-196 million][14] - The leverage ratio decreased to 42x in H1 2025, compared to 46x at the end of FY24[14] Business Segment Performance - Biopharma revenue grew by 82% cc in H1 2025[17] - Diagnostic revenue increased by 28% cc in H1 2025[23] Margin Expansion - Adjusted EBITDA margin increased by 80 bps in H1 2025, despite the IRA impact[17] - Like-for-like adjusted EBITDA margin increased by 171 bps in H1 2025[17] Capital Allocation - An interim dividend of €015 per share was reinstated[14] - Liquidity stands at €14 billion[43] Future Outlook - The company reaffirmed its 2025 guidance and improved its free cash flow pre-M&A guidance to €375 - €425 million[47]

Financial Performance - Boeing's free cash flow burn was only $200 million, significantly lower than the street's anticipation of approximately $2 billion [2] - Year-to-date free cash flow burn is 22% [2] - 737 production rate reached 38 per month, representing 50% of Boeing's estimated free cash flow [3][9] - Defense sector is showing a turnaround, with no losses reported for the second consecutive quarter [13] Order Momentum & Backlog - Boeing's backlog is currently at 7 years of production [6] - Year-to-date, Boeing has approximately 650 official orders [6] - Preliminary orders from trade deals amount to around 450, including deals with Qatar, Indonesia, Japan, and the EU [6] Production Rate & Targets - The company aims to increase the 737 production rate by 5 per month, targeting 42 per month initially, followed by a potential increase to 47 [10] - The aspirational target for monthly production rate is 52 to 55 [10] Trade & Tariffs - Trade deals are expected to build order momentum and support pricing, which will positively impact free cash flow [7] - Trade deals are considered a significant factor for Boeing, potentially adding substantial business [5]

Financial Performance - Revenue increased to $140.6 million in Q2 2025, up from $138.1 million in Q2 2024 and $135.2 million in Q1 2025[8, 10] - Net income rose to $7.3 million in Q2 2025, compared to $4.7 million in Q2 2024 and $0.6 million in Q1 2025[10] - Adjusted EBITDA for Q2 2025 was $20.6 million, with an Adjusted EBITDA Margin of 14.7%[10, 12] - Free Cash Flow generation was $14.4 million in Q2 2025[6, 10] Segment Highlights - High-Specification Rigs segment revenue was $86.3 million in Q2 2025[15] - Processing Solutions & Ancillary Services segment revenue increased to $32.2 million in Q2 2025[20] - Wireline Services segment revenue rebounded to $22.1 million in Q2 2025[25] Capital Returns - The company repurchased 278,100 shares in Q2 2025 for $3.3 million at an average price of $12.01 per share[6] - $4.6 million of Free Cash Flow was returned to shareholders through dividends and repurchases in Q2 2025[6] - Since the program inception, a total of 3,603,900 shares have been repurchased, representing 16% of the company's outstanding shares[6] Liquidity - The company ended Q2 2025 with $120.1 million of liquidity, including $48.9 million of cash on hand[13]

Our business delivered healthy results in Q2, led by MAU and Subscriber outperformance, Y/Y profitability improvement and strong Free Cash Flow* generation. The business added 18 million MAU in Q2 vs. guidance for 11 million, while Subscriber net additions of 8 million exceeded guidance by 3 million. Revenue grew 15% Y/Y on a constant currency* basis reflecting Premium and Ad-Supported growth. Outsized currency movements during the quarter impacted reported Revenue by €104 million vs. guidance. Gross Margin ...