OIS — Oil States International, Inc.

Summary of Oil States International, Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Revenues: $178 million, an 8% increase sequentially and year-over-year.
• Adjusted EBITDA: $23 million, a 9% sequential increase, at the top of the guidance range.
• Net Loss: $117 million ($2.04 per share), impacted by long-lived asset impairments and restructuring charges.
• Adjusted Net Income: $8 million ($0.13 per share) after excluding charges.
• Cash Flow from Operations: $50 million, a 63% increase sequentially; total cash flow for 2025 was $105 million.
• Free Cash Flow: $94 million for the year, up 92% year-over-year.
• Cash Position: Cash on hand exceeded total debt by $15 million at year-end.

2. Strategic Updates and Business Highlights

• The company is focusing on optimizing its business mix towards offshore and international markets, with 77% of revenues now coming from these areas.
• Significant backlog growth in the Offshore Manufactured Products segment, totaling $435 million, with a book-to-bill ratio of 1.3.
• Successful restructuring efforts in Completion and Production Services and Downhole Technologies segments led to improved margins.
• New technologies, including a managed pressure drilling system and a deep-sea mineral riser system, have been successfully deployed, enhancing operational efficiency and safety.
• The company is prioritizing shareholder returns, having repurchased $17 million in shares in 2025.

3. Forward Guidance and Outlook

• 2026 Full-Year Revenue Guidance: Expected between $680 million and $700 million.
• 2026 Full-Year EBITDA Guidance: Expected between $90 million and $95 million.
• Q1 2026 Guidance: Revenues projected between $150 million and $155 million, with EBITDA of $18 million to $19 million.
• Cash flows from operations are expected to remain strong, with anticipated CapEx of $20 million to $25 million for 2026.

4. Bad News, Challenges, or Points of Concern

• The net loss in Q4 was significantly impacted by noncash impairments and restructuring charges, indicating ongoing challenges in certain segments.
• The Downhole Technologies segment faced $112 million in impairments, reflecting a shift away from older product technologies.
• U.S. land activity is expected to remain subdued, which may impact revenue generation from that segment.
• Potential risks associated with macroeconomic conditions, including fluctuating crude oil prices, could affect future offshore investments.

5. Notable Q&A Insights

• Management confirmed that the restructuring and exit from underperforming operations are largely reflected in Q4 revenue run rates, with ongoing adjustments expected to decrease significantly.
• The Offshore Manufactured Products segment is expected to maintain strong margins, supported by backlog and improved absorption rates.
• The company is considering strategic acquisitions but remains focused on differentiated technologies, particularly in international markets rather than U.S. land-based operations.
• Military contracts have contributed positively to revenue and cash flow, with expectations for continued growth in this area due to increased defense spending.

Overall, Oil States International, Inc. demonstrated strong operational performance in Q4 2025, with a clear focus on strategic growth in offshore and international markets, despite facing challenges related to impairments and market conditions. The outlook for 2026 appears positive, with strong revenue and EBITDA growth anticipated.