Helmerich & Payne, Inc. Q2 FY2026 earnings call

1. Execution remains strong with adjusted EBITDA of $178 million. 2. Reactivated rigs in Saudi Arabia despite Middle East conflict, but it led to more OPEX classification impacting direct margins. 3. Flex Robotics in North America Solutions performed ahead of expectations, with plan to deploy 4 more systems. 4. Offshore segment secured long-term contract renewal from BP. 5. Completed sale of real estate in Tulsa, retired term loan balance ahead of schedule. 6. Macro environment: Middle East conflict changed energy outlook; North America rig count and activity tight with low inventories. 7. International markets: Latin America, Middle East, Australia had commercial progress; Argentina had 9 rigs operating in Valcamarta with path to 100% utilization.

North American Solutions: Averaged 136 contracted rigs in the second quarter, slightly above the midpoint of activity expectations. Segment direct margin was $215 million, close to the midpoint of guidance range. International Solutions: Ended the second quarter with 61 rigs working, generated approximately $11.5 million in direct margins, near the low end of guidance range. Offshore Solution: Generated a direct margin of approximately $27 million during the quarter, ahead of the midpoint of guidance range.

1. North America: Expect direct margins in third quarter to range between $230 - $240 million with rig count 137 - 143; full year rig count range raised to 138 - 144. 2. International: Rig count expected to average 58 - 68 in third quarter and full year; direct margin between $12 - $32 million. 3. Offshore: Average 30 - 35 management contracts and operating rigs; third quarter direct margin range $24 - $28 million, full year 100 - $115 million. 4. Capital expenditure: 2026 gross capital expenditure budget aligns with $270 - $310 million range; third quarter spending $100 - $130 million. 5. Cash taxes: Expected to range $125 - $150 million.

1. Middle East conflict causing rig suspensions. 2. Supply chain constraints leading to cost inflation. 3. Uncertainty from market dynamics in the Middle East.

Q: Arun Jaaram asks about recovery in NAS.

A: Trey and Mike respond on North America's scale, technology, and rig reactivation potential. 2.

Q: Scott Gruber asks about international guide.

A: Trey and Kevin discuss Middle East fluid situation and $45 million quarterly run rate target. 3.

Q: Derek Podhyzer asks about guide sequencing.

A: Trey and Todd talk about sequential improvement in margins and rig count. 4.

Q: Saurabh Pant asks about efficiencies and Flex Robotics.

A: Mike talks about Flex Robotics deployment, benefits, and commercial arrangements. 5.

Q: Eddie Kim asks about free cash flow.

A: Todd and Kevin discuss free cash flow conversion and debt pay down. 6.

Q: Keith Mackey asks about Latin America.

A: Mike talks about Argentina's competitive landscape and Venezuela's medium-term opportunity.