Financial Data and Key Metrics Changes - The first quarter results were in line with earlier expectations, but activity levels softened further in key segments and geographies, with adjusted free cash flow of $66 million and adjusted EBITDA margins at 21.2% [11][13] - Revenue expectations for 2025 have been adjusted to $4.6 billion to $5 billion, with adjusted EBITDA of $975 million to $1.1 billion, reflecting a conservative outlook due to market conditions [36][37] - The company has maintained a net leverage ratio of 0.5 times trailing 12 months adjusted EBITDA and liquidity of approximately $1.3 billion [41][34] Business Line Data and Key Metrics Changes - North America saw a sequential decline of 4%, while Mexico experienced a year-over-year decline of around 60% [12][70] - The Middle East and Asia regions showed year-on-year growth, demonstrating resilience and stability amidst overall market softness [12][18] - The company has divested its Argentina Pressure Pumping and Wireline businesses, which will impact revenue and EBITDA but allow for a focus on more profitable areas [25][27] Market Data and Key Metrics Changes - The overall international market has softened, particularly in Mexico and U.S. land activity levels, with lower commodity prices leading to cautious customer spending [18][20] - The company anticipates a broad-based slowdown in the second half of the year, influenced by global trade reductions and increased supply [22][24] - Despite the downturn, the company expects to maintain EBITDA margins in the low-20s, better than two years ago [24] Company Strategy and Development Direction - The company is focused on maintaining a sustainable dividend and share repurchase program while adapting its cost structure to current market conditions [41][42] - A multi-year cost optimization program is in place to achieve sustainable productivity gains through technology and lean processes [43] - The company aims to position its portfolio for the future with lower capital intensity and has identified growth opportunities in the Vaca Muerta region [25][120] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future but acknowledged the need to pivot due to changing market conditions [39] - The outlook is characterized by uncertainty, with management preparing for a range of outcomes while remaining hopeful for stability in key markets [51][56] - The company is focused on improving working capital efficiency to drive free cash flow conversion to a sustainable 50% [44][90] Other Important Information - The company has reduced its headcount by over 1,000 and annualized personnel expenses by over $100 million [23][99] - Recent U.S. tariffs and retaliatory tariffs have added uncertainty to the market, potentially impacting demand and pricing [20][130] - The company is exploring smaller tuck-in acquisitions while maintaining a flexible approach to capital allocation [122][124] Q&A Session Summary Question: How are key countries in MENA trending? - Management noted continued stability in MENA, with robust spending patterns in Kuwait, UAE, and Oman, while acknowledging potential challenges in Saudi Arabia due to rig count reductions [50][52][54] Question: What is the expected duration or severity of the downturn? - Management indicated that the downturn may be milder than previous cycles, with different causes in different regions, and expressed hope for a short-lived impact [58][60][62] Question: What is the magnitude of the impact from divestitures? - The divestitures are expected to reduce revenue by approximately 100 to 300 basis points, with additional adjustments made for market reductions in various regions [71][72] Question: How will the proceeds from divestitures be utilized? - Proceeds will enhance overall liquidity, support dividends, and facilitate opportunistic share repurchases or small acquisitions [76][77] Question: What is the potential impact of tariffs? - Management stated that quantifying the impact of tariffs is difficult at this stage, but they expect a reduction in activity levels due to uncertainty [128][134] Question: How is the digital strategy viewed in the current environment? - Management believes there is significant opportunity in production optimization and data utilization, which could lead to increased demand for digital solutions [138]