HALLIBURTON CO Q1 FY2025 earnings call

• Macro environment: Last three weeks were dynamic with trade uncertainty impacting oil and gas markets. - Segment results: Total company revenue $5.4 billion, adjusted operating margin 14.5%; generated $377 million cash flow from operations, $124 million free cash flow, and repurchased ~$250M common stock. - Geographic: International ex-Mexico up mid-single digits; North America down 12% Y/Y. - Technology: Achieved first closed loop autonomous fracturing operation with Zeus IQ; acquired Optime Subsea for deep water interventions; won integrated offshore contracts using advanced technologies. - Customer relationships: Strong contract awards, e.g., Shell scopes of work, demonstrating value proposition and service quality execution.

Completion and production division: Q1 revenue $3.1 billion, down 8% Y/Y; operating income $531 million, down 23% Y/Y; operating margin 17%. Drilling and evaluation division: Q1 revenue $2.3 billion, down 6% Y/Y; operating income $352 million, down 12% Y/Y; operating margin 15%. International revenue was $3.2 billion, a decrease of 2% Y/Y due to lower activity in Mexico; excluding Mexico, international revenues grew mid-single digits. North America revenue was $2.2 billion, 12% lower than Q1 2024.

• Q2 expectations: Completion and production division expected sequential revenue increase 1%-3% with margins flat; drilling and evaluation division expected revenue flat to down 2% with margins down 125-175 basis points. - Full year: Expect solid free cash flow; on pace to return at least $1.6 billion to shareholders through buybacks and dividends; full-year capital expenditures expected to be about 6% of revenue.

• Trade environment uncertainty injecting volatility into oil and gas markets. - Tariff impacts on certain product components, with an initial estimated $0.02-$0.03 per share impact in Q2. - Volatility in oil and gas commodity prices affecting customer behavior and activity levels.

Q: Neil Mehta from Goldman Sachs asks about U.S. activity, rig count, and oil price impact on customer behavior.

A: Jeff Miller responds that customers are digesting information, duration is part of their thinking, market in activity range with production impact as a governor on activity.

Q: J. David Anderson from Barclays asks about Saudi market growth and margin progression.

A: Jeff Miller states Saudi is a huge market with expected growth; Eric Carre explains Q2 margin guidance with tariff impacts and full-year margin expectations for D&E.

Q: Arun Jayaram from J.P. Morgan asks about international spending and VoltaGrid investment.

A: Jeff Miller discusses international growth in Europe, Africa, Middle East; Eric Carre talks about VoltaGrid investment as optionality.

Q: Roger Read from Wells Fargo Securities asks about Zeus IQ and free cash flow uses.

A: Jeff Miller elaborates on Zeus IQ's importance; Eric Carre states free cash flow plans remain similar to prior year.

Q: Saurabh Pant from Bank of America asks about tariff impacts and margin recovery.

A: Eric Carre details tariff impacts on components and margin recovery expectations; Jeff Miller discusses international growth regions excluding Mexico.

Q: Scott Gruber from Citigroup asks about VoltaGrid end game and CAPEX.

A: Jeff Miller talks about VoltaGrid as optionality; Eric Carre and Jeff Miller discuss CAPEX allocation and VoltaGrid investment longer term.

Q: Derek Podhaizer from Piper Sandler asks about gas basin activities and offshore position.

A: Jeff Miller is positive on gas markets and highlights Halliburton's strong position in offshore with advanced technology.

Q: Douglas Becker from Capital One asks about D&E margin recovery and severance charge.

A: Eric Carre confirms D&E margin recovery expectations and severance charge payback; Jeff Miller discusses pressure pumping business resiliency.

Q: Stephen Gengaro from Stifel asks about pressure pumping pricing and VoltaGrid differentiation.

A: Jeff Miller talks about pressure pumping contract resiliency and VoltaGrid as a strategic investment with sustainable differentiation