OIS — Oil States International, Inc.

Summary of Oil States International, Inc. Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Revenue: $165 million for Q3 2025.
• Adjusted EBITDA: $21 million.
• Net Income: $2 million ($0.03 per share), with adjusted net income of $5 million ($0.08 per share) after excluding charges related to restructuring.
• Backlog: Increased to $399 million, the highest level since June 2015.
• Cash Flow from Operations: Grew to $31 million, up 105% sequentially.
• Free Cash Flow: Generated $23 million.
• Book-to-Bill Ratio: 1.3 times, driven by strong military orders.

2. Strategic Updates and Business Highlights

• The company is shifting its revenue mix towards offshore and international projects, which now account for 75% of consolidated revenues.
• Strong performance in the Offshore Manufactured Products segment, with revenues up 2% sequentially and adjusted segment EBITDA rising 6%.
• Continued focus on optimizing operations and targeted investments in high-performing segments, particularly in offshore technologies.
• Recognition for safety and technology advancements, including two awards for health and safety improvements.

3. Forward Guidance and Outlook

• Anticipates Q4 2025 consolidated revenues to increase by 8% to 13% sequentially, with adjusted EBITDA expected to range from $21 million to $22 million.
• Full-year cash flow from operations projected to exceed $100 million.
• Analysts expect improved offshore and international markets in 2026, despite subdued US land activity.

4. Bad News, Challenges, or Points of Concern

• Decline in US land completion activity, with an 11% drop in average frac spread count due to lower crude oil prices and OPEC+ production adjustments.
• Significant revenue declines in the Completion and Production Services segment, down 61% sequentially, attributed to reduced US land-based activity.
• Downhole Technologies segment reported an adjusted EBITDA loss of $1 million, impacted by higher costs due to tariffs and lower international activity levels.
• Tariff increases on imported materials, particularly affecting the Downhole Technologies segment, could lead to higher costs passed onto customers.

5. Notable Q&A Insights

• Management indicated that while US land activity may remain low, there is a structural shift towards offshore spending due to lower breakeven costs and longer-lived reserves.
• Discussions highlighted the impact of tariffs on costs, particularly in the Downhole Technologies segment, with plans to mitigate these through inventory management and potential shifts in sourcing strategies.
• The company is focused on high-margin projects and is being selective in its US land operations to ensure profitability and cash flow generation.
• There is optimism regarding future bookings, particularly military contracts and production infrastructure, which are expected to support revenue growth moving forward.

Overall, Oil States International, Inc. is navigating a challenging environment with a strategic pivot towards offshore projects, while managing operational efficiencies and addressing tariff-related cost pressures. The outlook remains cautiously optimistic for 2026, with a focus on enhancing margins and cash flow.