Financial Data and Key Metrics Changes - The company generated quarterly revenues of just over $1 billion, with total direct operating costs at $702 million and general and administrative expenses approximately $81 million for the quarter [16][17]. - Gross capital expenditures for the second quarter were $159 million, aligning with expectations, while cash flow from operations was $56 million, negatively impacted by nonrecurring transaction-related costs and working capital challenges [18][27]. - The company maintains cash and short-term investments of $196 million, with an undrawn credit facility of $950 million, ensuring adequate liquidity for operations and debt repayment [27]. Business Line Data and Key Metrics Changes - In the North America Solutions segment, the average contracted rig count was 149, with revenues of $600 million, unchanged from the first quarter, and a direct margin of approximately $266 million, slightly stronger than the previous quarter [19][20]. - The International Solutions segment ended the quarter with 76 rigs working and a contracted drilling backlog of approximately $4 billion, generating a direct margin of $27 million, significantly impacted by rig suspensions in Saudi Arabia [20][22]. - The Offshore Solutions segment generated $26 million in direct margins, with a current backlog of $2.5 billion, benefiting from the KCAD acquisition [12][20]. Market Data and Key Metrics Changes - The company expects softer oil prices to lower the industry rig count as market volatility overrides potential incremental demand, with over 50% of customers preferring performance-based contracts [8][19]. - The average rig count in the North American Solutions segment is projected to range between 143 and 149 for the third quarter, with a revenue backlog of approximately $700 million [21][22]. Company Strategy and Development Direction - The company aims to execute its international growth strategy following the KCAD acquisition, which has positioned it as a global leader with the largest active rig count in the industry [5][6]. - The focus is on enhancing value and performance for customers and shareholders by prioritizing safety, drilling efficiency, and reliability [13][14]. - The company plans to realign cost structures, secure value-added synergies, and reduce debt on its balance sheet while remaining optimistic about scaling in prolific oil and gas regions [14][27]. Management's Comments on Operating Environment and Future Outlook - Management acknowledges headwinds from OPEC production increases and US tariff initiatives, but remains bullish about the long-term outlook for oil and gas markets, expecting demand to continue increasing [7][8]. - The company is focused on integrating operations and minimizing costs while addressing challenges in Saudi operations, with expectations for improvement in results as integration progresses [11][20]. - Management emphasizes the importance of performance-based contracts and technology solutions in driving efficiency and reliability for customers [9][22]. Other Important Information - The company is capturing synergies post-acquisition and has identified additional cost savings exceeding the original $25 million target by 2026 [26]. - The projected depreciation expense for the full year is around $595 million, with general and administrative expenses expected to be approximately $280 million [25][26]. Q&A Session Summary Question: What is the current state of the Saudi market regarding rig suspensions? - Management indicated uncertainty about the completion of the suspension cycle but noted that historically, rigs have returned to work after suspensions [30][32]. Question: How will the dynamics of rig suspensions and legacy HP rigs affect fiscal Q4? - Management expects a positive inflection in margins for Q4 as legacy HP rigs come online, offsetting the impact of suspensions [34][36]. Question: What is the expected contribution from the eight rigs in Saudi Arabia? - The anticipated contribution is around $25 million annually, with potential for this number to increase due to operational synergies [42][44]. Question: Will there be pressure on day rates in the domestic market due to rig count declines? - Management acknowledged the potential for pricing concessions but emphasized the importance of maintaining margins through performance-based contracts [52][102]. Question: Are there plans to relocate land rigs from Saudi Arabia to other markets? - Management confirmed that relocating rigs to neighboring countries is a possibility if they do not return to work [87][88]. Question: Is there potential for an increase in performance-based contracts? - While the current adoption rate is stable, management is actively pushing for more performance-based contracts as a means to provide value to customers [89][92].

Financial Data and Key Metrics Changes - Total reported revenue for Q1 2025 was $1,281 million, with a net income attributable to common shareholders of $1 million [24] - Adjusted EBITDA for the quarter totaled $251 million, and adjusted free cash flow generated was $51 million [24][39] - The company closed the quarter with $225 million in cash and an undrawn $500 million revolving credit facility [12][38] Business Line Data and Key Metrics Changes - In the Drilling Services segment, Q1 revenue was $413 million with an adjusted gross profit of $165 million [26] - The Completion Services segment reported revenue of $766 million and an adjusted gross profit of $108 million, with strong demand and high utilization [30] - Drilling Products revenue totaled $86 million with an adjusted gross profit of $39 million, showing steady performance across regions [32] Market Data and Key Metrics Changes - The U.S. contract drilling business had 9,573 operating days, with average rig revenue per day at $35,700 and average rig operating cost per day at $19,600 [27] - The company noted a strong performance in natural gas basins, particularly in the Haynesville region, with increased activity expected [15][19] Company Strategy and Development Direction - The company focuses on optimizing core operations and disciplined capital allocation, aiming for sustained success through integrated service offerings [7][10] - The strategy includes leveraging integrated agreements in drilling and completion businesses to enhance efficiency and maximize returns for investors [9][10] - The company plans to continue growing integrated work as a proportion of overall business, emphasizing value-accretive services over low pricing [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the oil market, noting potential softening if prices remain low, but highlighted stability in operations [14][68] - The outlook for natural gas is constructive, with expectations for increased drilling and completion activity to meet rising demand [15][43] - Management emphasized the importance of maintaining a strong balance sheet to navigate uncertainty and capitalize on opportunities [40][41] Other Important Information - The company returned $51 million to shareholders in Q1, including dividends and share repurchases [25] - The full-year 2025 net capital budget is set at approximately $600 million, with flexibility to adjust based on market conditions [37] Q&A Session Summary Question: Discussion on the evolution of the commercial model and integrated services - Management highlighted the unmatched breadth of offerings in U.S. shale, including drilling rigs, cementing services, and logistics, which enhance efficiency for E&Ps [49][50] Question: Thoughts on replacement CapEx and impacts of tariffs - Management indicated a measured approach to replacement CapEx, focusing on natural gas-powered equipment, while monitoring potential tariff impacts [51][55] Question: Clarification on completion guidance and expected activity levels - Management acknowledged a strong ramp-up in Q1 but expressed caution regarding potential white space in the second quarter due to oil price fluctuations [61][64] Question: Insights on potential activity declines in the second half of the year - Management noted that if oil prices remain low, some activity softening could occur, particularly among lower-spec rigs, but emphasized resilience among higher-tier operators [100][102] Question: Performance-based contracts and their adoption - Management reported that about 10% of operations now involve integrated performance-based contracts, with expectations for continued growth in this area [114][116]