Helmerich & Payne(US:HP)2025-08-07 16:00Financial Data and Key Metrics Changes - The company generated quarterly revenues of just over $1 billion for the second consecutive quarter [18] - Total direct operating costs were $735 million, and general and administrative expenses were approximately $66 million, representing a reduction of $15 million from the previous quarter [19] - EBITDA increased to $268 million from $242 million in the last quarter [20] Business Line Data and Key Metrics Changes - North American Solutions averaged 147 contracted rigs during the quarter, with a direct margin of $266 million, consistent with the previous quarter [20][21] - International Solutions ended the quarter with 69 rigs working, generating direct margins of $34 million, up $7 million from the second quarter [22] - Offshore Solutions segment generated $23 million in direct margins, benefiting from the inclusion of KCAD's offshore business [22] Market Data and Key Metrics Changes - The Permian Basin saw a 12% year-over-year decline in total rig count, while the company's market share in the region grew by over three percentage points [11] - The company is active in nearly all major basins outside of Russia and China, with growth opportunities identified in South America and other key markets [12] Company Strategy and Development Direction - The company remains focused on executing its global strategy to stay at the forefront of the drilling solutions industry, emphasizing customer-centric solutions and technological advancements [6][16] - The integration of KCAD is progressing well, with significant cost synergies already identified [15][28] - The company aims to leverage its broader operational footprint and expanded customer base to differentiate itself on the global stage [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges from volatile oil and natural gas prices but expressed confidence in the company's strategic initiatives and operational performance [5][6] - The outlook for growth in Saudi Arabia and the Middle East is positive, with expectations for increased activity in 2026 [14][33] - Management remains cautious about the impact of tariffs and commodity price fluctuations on future performance [21] Other Important Information - The company recorded an impairment of a significant part of the goodwill from the KCAD acquisition, primarily due to a drop in equity price [23] - The company expects to pay down $200 million on its term loan by the end of the calendar year, reflecting improved cash flow generation [29] Q&A Session Summary Question: Growth in international business from fiscal fourth quarter - Management indicated that there are opportunities for growth in Saudi Arabia, with tenders expected to emerge in 2026 [30][33] Question: Ongoing conversations about suspended rigs - Management noted that the worst is behind them, but the timing for resuming operations remains uncertain, likely pushing into 2026 [37] Question: Adoption of performance contracts - Management highlighted that performance contracts are being adopted by a range of customers, including small privates and large majors, with ongoing interest in international markets [42][46] Question: Rig count guidance and market share - Management explained that the guidance for rig count reflects a combination of effective churn management and potential new rig additions [60][90] Question: Competitive landscape and pricing pressures - Management acknowledged industry-wide pricing pressures but emphasized that they price based on the value delivered to customers [91][92]