HALLIBURTON CO Q3 FY2024 earnings call

Highlights - Delivered total company revenue of $5.7 billion and adjusted operating margin of 17%. - Generated $841 million of cash flow from operations, $543 million of free cash flow, and repurchased approximately $200 million of common stock. - Cybersecurity event had minor impact on financials but full-year free cash flow and shareholder returns unchanged. ### International - Revenue grew 4% year-over-year, led by Middle East Asia. Confident in international growth in low- to mid-single digits in 2025. Key business lines (cementing, completion tools, drilling fluids) are leaders. Sperry Drilling's technology developments drove growth. Focus on unconventionals, artificial lift, and intervention for growth. ### North America - Revenue down 4% in Q3, expected full-year decline at low end of prior guidance. 90% of frac fleets committed for 2025, with Zeus fleets potentially 50% of capacity. Zeus platform technologies (electric pumping units, Octiv Auto Frac, Sensori) driving adoption. Drilling services grew ~20% year-over-year despite rig count decline. Strategy to maximize value, focusing on returns, leading service quality, and differentiated technology.

Total company revenue was $5.7 billion with an adjusted operating margin of 17%. International revenue was $3.3 billion, growing 4% year-over-year, led by Middle East Asia (up 9%). North America revenue was $2.4 billion, down 9% year-over-year. The Completion and Production division had Q3 revenue of $3.3 billion, a 3% sequential decrease, with operating income of $669 million, a 7% sequential decrease, and an operating margin of 20%. The Drilling and Evaluation division had Q3 revenue of $2.4 billion, flat sequentially, with operating income of $406 million, flat sequentially, and an operating margin of 17% (up 36 basis points). Geographic results: Europe Africa revenue was $722 million, down 5% sequentially; Middle East Asia revenue was $1.5 billion, up 3% sequentially; Latin America revenue was $1.1 billion, down 4% sequentially; North America revenue was $2.4 billion, down 4% sequentially.

Full-Year - Expect free cash flow and cash returned to shareholders unchanged, to accelerate in Q4. ### Q4 - Completion and Production division: sequential revenue decline 1-3%, margins down 75-125 basis points. - Drilling and Evaluation division: sequential revenue flat to up 2%, margins flat to up 50 basis points. ### 2025 - International growth in low- to mid-single digits. North America to continue widening moat around Zeus platform and grow drilling business.

• Cybersecurity event: Impacted earnings and free cash flow via lost/revenue, delayed billing/collections; paused share repurchase. - SAP deployment: Delayed 3-6 months, cost ~$20-30 million more than initial estimate due to lessons from cybersecurity event and implementation. - External factors: Storms in Gulf of Mexico impacted North America revenue; regulatory and economic factors affecting energy development.

Q: How might the election impact your business?

A: Positive, optimistic as it reflects a rational view on energy importance, beneficial for North America onshore business.

Q: What's the outlook for North America Completion and Production next year?

A: 90% of frac fleets committed for 2025, focus on maximizing value, leading efficiency with Zeus platform.

Q: What are the impacts of the cybersecurity event on ERP rollout?

A: Delayed 3-6 months, cost ~$20-30 million more due to lessons from cybersecurity event and implementation.

Q: Thoughts on stock buybacks?

A: Paused open purchases during cyber incident, plan to catch up in Q4, view buybacks as systematic cash return.

Q: Outlook for offshore and drilling tech?

A: Offshore stable; rotary steerables and drilling tech growing in North America and internationally.

Q: Impact of oil demand and customer optimism?

A: Customers are large, well-capitalized, focused on efficiency and technology; commodity price supports consistent activity.