Oil States International, Inc. Q4 FY2025 earnings call

• Strong fourth quarter results with adjusted EBITDA exceeding guidance and high quarterly cash flows from operations. • Progressing multiyear strategy to optimize business mix towards offshore and international markets. • Backlog conversion, disciplined execution, and improved margins in Completion and Production Services and Downhole Technologies segments. • Offshore Manufactured Products segment had standout quarter with revenues and adjusted segment EBITDA surging sequentially, backlog at high level. • Focus on high-grading technologies and service lines in Completion and Production Services, and market introductions in Downhole Technologies. • Secured new contracts and deployed advanced offshore technologies, with Merlin deep sea mineral riser system achieving record deployment. • Generated strong cash flow from operations, used to retire convertible senior notes, ending 2025 with cash on hand exceeding debt by $15 million.

Offshore Manufactured Products segment: Fourth quarter revenues of $123 million, adjusted segment EBITDA of $25 million (20% margin), backlog $435 million as of Dec 31, 1.3 times book-to-bill ratio. Completion and Production Services segment: Fourth quarter revenues $23 million, adjusted segment EBITDA $7 million (32% margin), with $5 million in facility exit and other restructuring charges in Q4. Downhole Technologies segment: Fourth quarter revenues $32 million, up 11% sequentially, adjusted segment EBITDA $1.3 million, with noncash long-lived asset and inventory impairment charges of $112 million.

• 2026 full-year revenues expected to range between $680 million and $700 million, full-year EBITDA between $90 million and $95 million. • First quarter 2026 revenues expected in range of $150 million to $155 million, EBITDA $18 million to $19 million. • Cash flows from operations in 2026 expected in range of $60 million to $65 million. • CapEx investments in 2026 planned at $20 million to $25 million.

• Risks related to factors affecting business as disclosed in 2024 Form 10-K and recent SEC filings, including potential impact of market trends, competition, and regulatory changes. • Impact of tariffs on certain products, such as the earlier tariff hit on perforating due to sourcing gun steel from China. • Uncertainties in the offshore cycle and its impact on business operations and revenues.

Q: On the Completion and Production side, has the exiting of underperforming businesses completely reflected in the 4Q revenue run-rate levels?

A: Yes, with about $1 million of revenues from exited operations in 4Q and $21 million for full-year 2025.

Q: When we think about the backlog levels in the Offshore Manufactured Products business, is the embedded margin profile materially better than it was exiting the year 8–12 months ago?

A: There have been initiatives to improve margins, including new facilities, but mix, absorption, and utilization affect margins.

Q: The CPS margins in the quarter—was there anything unusual in that 32%?

A: Likely some facility sale gains, but comfortable with EBITDA margins in 30% to 34% range.

Q: Curious about offshore opportunities geographically and positioning for growth?

A: Brazil, Guyana, Southeast Asia are key regions, with focus on expanding product and service offerings.

Q: Thoughts on the offshore cycle?

A: Underinvestment in long term if believing in demand for crude oil, with long lead times and rig equipment leading recovery.

Q: Impact of Supreme Court striking down Trump’s sweeping tariffs?

A: Welcome news with more predictable cost structure, particularly beneficial for perforating side.

Q: Potential additions to portfolio?

A: Looking for differentiated technology and opportunities, selective in land U.S. due to replication challenges