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

1Key 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.

2Strategic 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.

3Forward 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.

4Bad 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.

5Notable 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.