Halliburton Company Q2 FY2025 earnings call

• Jeff Miller opened by discussing the softer oilfield services market influenced by volatile commodity markets, schedule gaps in North America, and reductions in international activity. Halliburton is aligned with themes like unconventionals, production-related services, and complex drilling. - International markets had $3.3 billion in quarterly revenue, with 2% sequential growth, but full-year international revenue expected to contract mid-single digits. Highlights in unconventionals, drilling services, production services, and artificial lift. - North America had $2.3 billion in Q2 revenue, roughly flat to Q1, with activity reductions affecting the market, but Halliburton's technology remains a differentiator. - Eric Carre provided financial results: Q2 net income per diluted share $0.55, total revenue $5.5 billion, up 2% from Q1. Discussed segment and geographic results, Q3 expectations for Completion and Production and Drilling and Evaluation divisions, and other financial items like expenses, taxes, and CapEx.

Completion and Production division: Q2 revenue was $3.2 billion, an increase of 2% compared to Q1 2025. Operating income was $513 million, a decrease of 3% compared to Q1 2025, with operating income margin at 16%. Drilling and Evaluation division: Q2 revenue was $2.3 billion, an increase of 2% compared to Q1 2025. Operating income was $312 million, a decrease of 11% compared to Q1 2025, with operating income margin at 13%. Geographic results: International revenue increased 2% sequentially. Europe-Africa revenue in Q2 was $820 million, up 6% sequentially. Middle East Asia revenue in Q2 was $1.5 billion, down 4% sequentially. Latin America revenue in Q2 was $977 million, up 9% sequentially. North America Q2 revenue was $2.3 billion, relatively flat compared to Q1 2025.

• Q3 expectations: Completion and Production division anticipated sequential revenue to decrease 1% to 3% and margins to decrease 150 to 200 basis points. Drilling and Evaluation division expected sequential revenue to decline 1% to 3% and margins to improve 125 to 175 basis points. - Full-year North America revenue expected to decline low double digits year-over-year. - Free cash flow for 2025 expected to be between $1.8 billion and $2 billion.

• Tariffs impacting the business, with Q3 expected negative impact of about $35 million or $0.04 per share. - Market volatility and geopolitical unrest affecting oilfield services market conditions. - Activity reductions in key markets like Saudi Arabia and Mexico impacting revenue. - Equipment wear and tear due to high-pressure operations in fracking and gas, leading to potential fleet attrition.

Q: Neil Mehta asked about C&P margins.

A: Eric Carre responded on C&P margins versus Q2 guidance and Q3 guide details.

Q: Dave Anderson asked about E&Ps resetting programs.

A: Jeff Miller discussed market supply and demand fundamentals and steps taken to address the situation.

Q: Arun Jayaram asked about unconventionals in the Middle East.

A: Jeff Miller talked about Halliburton's positioning in Middle East unconventionals and tendering discipline.

Q: Roger Read asked about North America outlook.

A: Jeff Miller discussed market visibility, customer strategies, and focus on returns.

Q: Saurabh Pant asked about cost structure.

A: Jeff Miller and Eric Carre spoke about variable and fixed cost reduction and margin protection.

Q: Marc Bianchi asked about Q4 visibility.

A: Eric Carre provided color on Q4 revenue and margin trends.

Q: Scott Gruber asked about CapEx and ZEUS fleet.

A: Jeff Miller commented on ZEUS fleet expansion and CapEx expectations.

Q: Derek Podhaizer asked about artificial lift.

A: Jeff Miller and Eric Carre discussed artificial lift in U.S. and international markets.

Q: Stephen Gengaro asked about pricing and fleet attrition.

A: Jeff Miller responded on pricing strategy and expected fleet attrition.

Q: Doug Becker asked about free cash flow.

A: Eric Carre confirmed free cash flow range for 2025 and cash return framework