What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2026-02-05 · 317 added, 123 removed, 316 unchanged (58% of the section changed)

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• environmental or other liabilities, risks, damages or losses, whether related to storms or hurricanes (including wreckage or debris removal), collisions, grounding, blowouts, fires, explosions, other accidents, terrorism or otherwise, for which insurance coverage and contractual indemnities may be insufficient, unenforceable or otherwise unavailable;

• the impact of geopolitical developments and tensions, war and uncertainty involving or in the geographic region of oil-producing countries (including the ongoing armed conflicts between Russia and Ukraine, conflicts in the Middle East, recent shifts in Venezuela's political landscape, and any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy);

• the impact of geopolitical developments and tensions, war and uncertainty involving or in the geographic region of oil-producing countries (including the ongoing armed conflicts between Russia and Ukraine, the military conflict with Iran and the associated disruption to the Strait of Hormuz, other conflicts in the Middle East, and any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy);

Q2 FY26 FORM 10-Q | 31

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H&P through its operating subsidiaries provides performance-driven drilling solutions and technologies that are intended to make hydrocarbon recovery safer and more economical for oil and gas exploration and production companies.

As of December 31, 2025, our drilling rig fleet included a total of 338 drilling rigs.

Our reportable operating business segments consist of the North America Solutions segment with 203 rigs, the International Solutions segment with 131 rigs, and the Offshore Solutions segment with four offshore platform rigs as of December 31, 2025.

As of March 31, 2026, our drilling rig fleet included a total of 337 drilling rigs.

Our reportable operating business segments consist of the North America Solutions segment with 203 rigs, the International Solutions segment with 130 rigs, and the Offshore Solutions segment with four offshore platform rigs as of March 31, 2026.

Although the Offshore Solutions segment has a fleet of platform rigs, the majority of its revenues are derived from asset-light management contracts.

At the close of the first quarter of fiscal year 2026, we had 201 active contracted rigs, of which 127 were under a fixed-term contract and 74 were working well-to-well, compared to 208 contracted rigs at September 30, 2025.

At the close of the second quarter of fiscal year 2026, we had 204 active contracted rigs, of which 138 were under a fixed-term contract and 66 were working well-to-well, compared to 208 contracted rigs at September 30, 2025.

Our long-term strategy remains focused on innovation, technology, safety, operational excellence, and reliability.

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Generally, the level of capital expenditures is dictated by capital budgets set to achieve respective production targets in relation to current and expected future prices of crude oil and natural gas, which are determined by various supply and demand factors and have historically been volatile.

Furthermore, E&Ps have become more fiscally disciplined in their level of capital expenditures relative to commodity price fluctuations and the amount of free cash flows that can be returned to their shareholders, which has resulted in less volatility within the oilfield service businesses, including our operations.

Over time, however, E&Ps have become more fiscally disciplined in their level of capital expenditures relative to commodity price fluctuations and the amount of free cash flows that can be returned to their shareholders, which has resulted in more stable and predictable demand for oilfield service businesses, including our operations.

Q2 FY26 FORM 10-Q | 32

In early calendar year 2025, the announcements by the U.S.

government regarding the implementation of global tariffs and OPEC+ regarding the planned increase of crude oil supply created continued uncertainty in the global energy markets.

More recently, heightened geopolitical tensions in the Middle East and ongoing political developments in Venezuela have perpetuated and elevated the level of uncertainty further.

Although we do not anticipate that these announcements and events will have a direct material impact on the Company's operations or financial results, we believe the indirect effects could potentially lead to reduced activity in fiscal year 2026 as operators evaluate activity levels commensurate with commodity prices.

More recently, heightened geopolitical tensions in the Middle East including ongoing armed conflict and instability affecting key energy-producing and transit regions, such as the Strait of Hormuz, and ongoing political developments in Venezuela have perpetuated and elevated the level of uncertainty further.

These developments have contributed to increased volatility in global crude oil and natural gas prices and have led market participants to reassess supply risks, transportation reliability, and near-term capital allocation decisions.

Although we do not anticipate that these announcements and events will have a direct material impact on the Company's operations or financial results, we believe the indirect effects of sustained geopolitical uncertainty, including the potential for supply-side disruptions and transportation risks may support increased drilling activity levels as operators seek to mitigate these potential disruptions and respond to elevated or more volatile commodity prices.

Both crude oil and natural gas prices are volatile and global economic conditions heavily influence activity levels in the United States.

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however, other variables have a heavy influence on those activity levels, including disparate country budgets and the need to fund other commitments in certain areas.

Q1 FY26 FORM 10-Q | 30

During the three months ended December 31, 2025, we received notifications to resume operations on seven rigs in Saudi Arabia scheduled for the first half of calendar year 2026.

During the six months ended March 31, 2026, we received notifications to resume operations on seven rigs in Saudi Arabia scheduled for the first half of calendar year 2026.

Of these, six rigs are expected to be operational within that timeframe, while the reactivation date for the seventh rig is yet to be determined.

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Assets Held-for-Sale

During the three months ended December 31, 2025, we committed to a plan to scrap 30 rigs and auxiliary equipment within our North America Solutions segment and three rigs within our Offshore Solutions segment as part of our strategy to right size our fleet and reduce expenses.

Of the 30 North America Solutions rigs, 10 were previously decommissioned.

The book values of those assets in our North America Solutions and Offshore Solutions segments were written down to the fair value less estimated cost to sell, and were reclassified as held-for-sale during the three months ended December 31, 2025.

As a result, we recognized a non-cash impairment charge of $97.9 million and $2.1 million in the North America Solutions and Offshore Solutions segments respectively, during the three months ended December 31, 2025, in the Unaudited Condensed Consolidated Statement of Operations.

As of December 31, 2025, the aggregate net book value of North America Solutions and Offshore Solutions assets classified as held-for-sale was $4.4 million and $0.6 million, respectively.

In October 2025 , we committed to a plan to scrap certain rigs and related assets across our operating segments as part of our fleet rationalization strategy.

As a result, these assets were reclassified as held-for-sale and, where applicable, written down to fair value less cost to sell.

This resulted in non-cash impairment charges of $97.9 million and $2.1 million in the North America Solutions and Offshore Solutions segments, respectively during the six months ended March 31, 2026.

Additionally, in March 2026, we identified an international drilling rig within our International Solutions segment that met the asset held-for-sale criteria and was therefore written down to fair value less cost to sell.

This resulted in a non-cash impairment charge of $23.3 million during the six months ended March 31, 2026.

During the six months ended March 31, 2026, we also recognized a non-cash impairment charge of $2.8 million related to assets previously classified as held-for-sale within our International Solutions segment.

Sale of Utica Square Property

Subsequent to March 31, 2026, we completed the sale of Utica Square, a shopping center comprising approximately 371,000 leasable square feet located in Tulsa, Oklahoma, and included within our "Other" operations, receiving net proceeds of approximately $129.0 million, after deducting $4.9 million in selling fees.

The property was classified as held-for-sale as of March 31, 2026, with a net book value of $12.9 million.

Repayment of Term Loan

Subsequent to March 31, 2026, the Company fully repaid the remaining balance of $140.0 million outstanding under the Term Loan Credit Agreement.

As a result of this repayment, no amounts remain outstanding under the Term Loan Credit Agreement.

Contract Backlog

As of December 31, 2025 and September 30, 2025, our total contract drilling backlog, being the expected future dayrate revenue from executed contracts, was $7.0 billion.

Approximately 16.6 percent of the December 31, 2025 total backlog is reasonably expected to be fulfilled through fiscal year 2026, as a majority of our contracts are long term.

The following table sets forth the total backlog by reportable segment as of December 31, 2025 and September 30, 2025:

(in billions) December 31, 2025 September 30, 2025

As of March 31, 2026 and September 30, 2025, our total contract drilling backlog, being the expected future dayrate revenue from executed contracts, was $8.3 billion and $7.0 billion, respectively.

The increase was primarily due to an extension of an offshore operations and maintenance contract with a five-year term and additional extension options.

Approximately 13.3 percent of the March 31, 2026 total backlog is reasonably expected to be fulfilled throughout the remainder of fiscal year 2026, as a majority of our contracts are long term.

Q2 FY26 FORM 10-Q | 33

The following table sets forth the total backlog by reportable segment as of March 31, 2026 and September 30, 2025:

(in billions) March 31, 2026 September 30, 2025

Firm contracts 1 :

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(1) These amounts do not include anticipated contract renewals or expected performance bonuses.

(2) Included in the International Solutions reportable segment's backlog balance at December 31, 2025 is $461.6 million of expected revenue from certain contracts in Saudi Arabia that have been temporarily suspended and are expected to gradually resume operations.

(2) Included in the International Solutions reportable segment's backlog balance at March 31, 2026 is $0.5 billion of expected revenue from certain contracts in Saudi Arabia that have been temporarily suspended and are expected to gradually resume operations.

The information presented in the table above reflects the fact that we expect these contracts to be extended for a period of time at least equal to the expected suspension period.

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” and Item 1A—Risk Factors—" The impact and effects of public health crises, pandemics and epidemics could have a material adverse effect on our business, financial condition and results of operations ” within our 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), regarding fixed term contract risk.

Q1 FY26 FORM 10-Q | 31

Results of Operations for the Three Months Ended December 31, 2025 and 2024

Results of Operations for the Three Months Ended March 31, 2026 and 2025

It is important to note that results presented for the three months ended March 31, 2025 reflect a full 90 days of H&P operations and 75 days of KCA Deutag operations, as the Acquisition was completed on January 16, 2025.

Consolidated Results of Operations

Net Income (Loss) Attributable to Helmerich & Payne Inc.

We recorded a loss of $96.7 million ($(0.98) diluted share) for the three months ended December 31, 2025 compared to income of $54.8 million ($0.54 diluted share) for the three months ended December 31, 2024.

Operating Revenue During the three months ended December 31, 2025 and 2024, consolidated operating revenues were $1.0 billion and $0.7 billion, respectively.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $342.5 million of revenue during the three months ended December 31, 2025.

Direct Operating Expenses, Excluding Depreciation and Amortization Direct operating expenses were $682.8 million and $410.9 million for the three months ended December 31, 2025 and 2024, respectively.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $270.4 million in direct operating expenses during the three months ended December 31, 2025.

Other Operating Expenses Other operating expenses were $31.3 million and $1.2 million for the three months ended December 31, 2025 and 2024, respectively.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $30.0 million of costs associated with BENTEC™ manufacturing and engineering operations.

Depreciation and Amortization Expense Depreciation and amortization expense increased to $181.9 million during the three months ended December 31, 2025 compared to $99.1 million during the three months ended December 31, 2024.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $79.3 million in depreciation and amortization expense during the three months ended December 31, 2025.

Selling, General and Administrative Expense Selling, general and administrative expenses increased to $70.4 million during the three months ended December 31, 2025 compared to $63.1 million during the three months ended December 31, 2024.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $16.9 million in selling, general and administrative expenses during the three months ended December 31, 2025.

The increase was partially offset by a $5.7 million decrease in professional services and IT related expenses and a $3.0 million decrease in labor and labor-related expenses.

Asset Impairment Charges Dur ing the three months ended December 31, 2025, we recorded a non-cash impairment charge of $103.1 million primarily related to certain assets that were reclassified as held‑for‑sale within our North America Solutions and Offshore Solutions segments.

We recorded a loss of $58.6 million ($(0.59) diluted share) for the three months ended March 31, 2026 compared to income of $1.7 million ($0.01 diluted share) for the three months ended March 31, 2025.

Operating Revenue During the three months ended March 31, 2026 and 2025, consolidated operating revenues were $0.9 billion and $1.0 billion, respectively.

The decrease was primarily driven by lower activity levels in our North America Solutions and International Solutions segments, partially offset by higher activity levels in our Offshore Solutions segment.

Direct Operating Expenses, Excluding Depreciation and Amortization Direct operating expenses were $661.2 million and $701.7 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease was also primarily driven by lower activity levels in our North America Solutions and International Solutions segments, partially offset by higher activity levels in our Offshore Solutions segment.

Other Operating Expenses Other operating expenses were $24.8 million and $3.5 million for the three months ended March 31, 2026 and 2025, respectively.

The increase was primarily driven by $21.3 million of incremental BENTEC™ manufacturing and engineering costs resulting from an additional 15 days of KCA Deutag operations during the three months ended March 31, 2026.

Depreciation and Amortization Expense Depreciation and amortization expense increased to $180.7 million during the three months ended March 31, 2026 compared to $157.7 million during the three months ended March 31, 2025.

The increase was primarily driven by $22.3 million of incremental depreciation and amortization expense resulting from an additional 15 days of KCA Deutag operations during the three months ended March 31, 2026..

Selling, General and Administrative Expense Selling, general and administrative expenses decreased to $71.1 million during the three months ended March 31, 2026 compared to $80.8 million during the three months ended March 31, 2025.

The $9.7 million decrease was primarily driven by a $3.1 million decrease in labor and labor-related expenses and a $6.6 million decrease in other miscellaneous expenses.

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Asset Impairment Charges Dur ing the three months ended March 31, 2026, we recorded a non-cash impairment charge of $26.1 million primarily related to certain assets that were reclassified as held‑for‑sale within our International Solutions segment.

The reclassification required us to adjust the assets to their fair value, which corresponded to their scrap value, resulting in the impairment.

See Note 3—Property, Plant and Equipment for additional details related to the impairment charges.

Interest Expense Interest expenses were $25.6 million and $22.3 million for the three months ended December 31, 2025 and 2024, respectively.

The increase was mainly attributable to higher debt activity associated with the completion of the Acquisition.

Interest Expense Interest expenses were $25.8 million and $28.3 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease was mainly attributable to lower debt balances due to advanced payments on our unsecured term loan agreement .

See Note 5—Debt for additional details related to our debt agreements.

Gain (Loss) on Investment Securities During the three months ended December 31, 2025, we recognized an aggregate gain of $0.9 million on investment securities.

Gain on Investment Securities During the three months ended March 31, 2026, we recognized an aggregate gain of $14.4 million on investment securities.

The aggregate gain primarily consisted of a $19.5 million gain on our investment in Tamboran due to a change in the fair value of the investment.

During the three months ended December 31, 2024, we recognized a loss of $13.4 million on investment securities.

The aggregate loss is mainly comprised of a $12.4 million loss on our sale of equity investments in ADNOC Drilling.

Additionally, during the three months ended December 31, 2024, we recognized a $1.1 million loss on our equity investment in Tamboran Corp.

as a result of a decrease in fair market value of the stock.

Income Taxes For the three months ended December 31, 2025, we recorded income tax expense of $11.2 million (which includes a discrete tax expense of $4.3 million primarily related to equity compensation and unrecognized tax benefits) compared to income tax expense of $21.6 million for the three months ended December 31, 2024 (which includes a discrete tax expense of $0.7 million primarily related to equity compensation).

The gain was partially offset by a $5.0 million loss on a geothermal equity security due to a change in the fair value of the investment.

During the three months ended March 31, 2025, we recognized a gain of $27.8 million on investment securities.

The aggregate gain primarily consisted of $14.4 million, $10.2 million, and $3.2 million of gains on various geothermal investments, our investment in Galileo, and our investment in Tamboran, respectively, due to changes in the fair value of the investments.

Income Taxes For the three months ended March 31, 2026, we recorded income tax expense of $9.3 million (which includes a discrete tax expense of $0.5 million primarily related to equity compensation and unrecognized tax benefits) compared to income tax expense of $41.5 million for the three months ended March 31, 2025.

Our statutory federal income tax rate for fiscal year 2026 and 2025 is 21.0 percent (before incremental state and foreign taxes).

North America Solutions

Three Months Ended March 31,

(in thousands, except operating statistics) 2026 2025 % Change

Operating revenues $ 517,245 $ 599,694 (13.7) %

Direct operating expenses 302,038 334,073 (9.6)

Depreciation and amortization 82,955 87,151 (4.8)

Research and development 7,115 9,502 (25.1)

Selling, general and administrative expense 13,401 15,484 (13.5)

Acquisition transaction and integration costs

Asset impairment charges — 1,507 (100.0)

Restructuring charges

Segment operating income $ 111,334 $ 151,943 (26.7)

Financial Data and Other Operating Statistics 1 :

Direct margin (Non-GAAP) 2

$ 215,207 $ 265,621 (19.0)

Revenue days 3

12,208 13,416 (9.0)

Average active rigs 4

136 149 (8.7)

Number of active rigs at the end of period 5

137 150 (8.7)

Number of available rigs at the end of period 203 224 (9.4)

Reimbursements of "out-of-pocket" expenses $ 60,401 $ 77,607 (22.2)

(1) These operating metrics and financial data, including average active rigs, are provided to allow investors to analyze the various components of segment financial results in terms of activity, utilization and other key results.

Management uses these metrics to analyze historical segment financial results and as the key inputs for forecasting and budgeting segment financial results.

(2) Direct margin, which is considered a non-GAAP metric, is defined as operating revenues less direct operating expenses and is included as a supplemental disclosure because we believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time.

See — Non-GAAP Measurements below for a reconciliation of segment operating income (loss) to direct margin.

(3) Defined as the number of contractual days for owned and leased rigs with recognized revenue during the period.

(4) Active rigs generate revenue for the Company;

accordingly, 'average active rigs' represents the average number of rigs generating revenue during the applicable time period.

This metric is calculated by dividing revenue days by total days in the applicable period (i.e., 90 days).

(5) Defined as the number of rigs generating revenue at the applicable end date of the time period.

Operating Revenues Operating revenues were $517.2 million and $599.7 million in the three months ended March 31, 2026 and 2025, respectively.

The decrease in operating revenues was primarily due to lower activity levels and per revenue day pricing levels.

Direct Operating Expenses Direct operating expenses decreased to $302.0 million during the three months ended March 31, 2026 as compared to $334.1 million during the three months ended March 31, 2025.

This decrease was primarily due to lower activity levels as discussed above.

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Depreciation and Amortization Expense Depreciation expense decreased to $83.0 million during the three months ended March 31, 2026 compared to $87.2 million during the three months ended March 31, 2025.

The decrease was primarily driven by a reduction in depreciable asset balances associated with the reclassification of assets to held‑for‑sale during the first quarter of fiscal year 2026.

See Note 3—Property, Plant and Equipment for additional details related to our held-for-sale assets.

International Solutions

Three Months Ended March 31,

(in thousands, except operating statistics) 2026 2025 % Change

Operating revenues $ 218,321 $ 247,909 (11.9) %

Direct operating expenses 206,826 220,983 (6.4)

Depreciation and amortization 79,257 57,153 38.7

Selling, general and administrative expense 4,249 4,546 (6.5)

Acquisition transaction and integration costs

1,198 210 470.5

Asset impairment charges 26,101 — —

Restructuring charges 302 — —

Segment operating loss $ (99,612) $ (34,983) (184.7)

Financial Data and Other Operating Statistics 1 :

Direct margin (Non-GAAP) 2

$ 11,495 $ 26,926 (57.3)

Revenue days 3

5,492 6,198 (11.4)

Average active rigs 4

Number of active rigs at the end of period 5

Number of available rigs at the end of period 130 153 (15.0)

Reimbursements of "out-of-pocket" expenses $ 12,785 $ 8,470 50.9

Management uses these metrics to analyze historical segment financial results and as the key inputs for forecasting and budgeting segment financial results.

See — Non-GAAP Measurements below for a reconciliation of segment operating income (loss) to direct margin.

(3) Defined as the number of contractual days for owned and leased rigs with recognized revenue during the period.

(4) Active rigs generate revenue for the Company;

accordingly, 'average active rigs' represents the average number of rigs generating revenue during the applicable time period.

This metric is calculated by dividing revenue days by total days in the applicable period (i.e., 90 days).

(5) Defined as the number of rigs generating revenue at the applicable end date of the time period.

Operating Revenues Operating revenues were $218.3 million and $247.9 million in the three months ended March 31, 2026 and 2025, respectively.

The $29.6 million decrease in operating revenues was primarily driven by lower activity levels, including the impact of a full‑period rig suspensions in Saudi Arabia during the three months ended March 31, 2026 compared to partial‑period rig suspensions during the three months ended March 31, 2025.

Direct Operating Expenses Direct operating expenses decreased to $206.8 million during the three months ended March 31, 2026 as compared to $221.0 million during the three months ended March 31, 2025.

The decrease was primarily driven by lower activity levels as discussed above.

Depreciation and Amortization Expense Depreciation expense increased to $79.3 million during the three months ended March 31, 2026 compared to $57.2 million during the three months ended March 31, 2025.

The increase was primarily driven by $19.0 million of incremental depreciation and amortization expense resulting from an additional 15 days of KCA Deutag operations during the three months ended March 31, 2026.

The reclassification required us to adjust the assets to their fair value, which corresponded to their scrap value, resulting in the impairment.

See Note 3—Property, Plant and Equipment for additional details related to the impairment charges.

Q2 FY26 FORM 10-Q | 36

Offshore Solutions

Three Months Ended March 31,

(in thousands, except operating statistics) 2026 2025 % Change

Operating revenues $ 171,378 $ 149,080 15.0 %

Direct operating expenses 144,495 122,904 17.6

Depreciation and amortization 9,862 7,777 26.8

Selling, general and administrative expense 2,654 964 175.3

Acquisition transaction and integration costs

Segment operating income $ 14,015 $ 17,375 (19.3)

Financial Data and Other Operating Statistics 1 :

Direct margin (Non-GAAP) 2

$ 26,883 $ 26,176 2.7

Revenue days 3

Average active rigs 4

Number of active rigs at the end of period 5

Number of available rigs at the end of period 4 7 (42.9)

Reimbursements of "out-of-pocket" expenses $ 27,575 $ 26,936 2.4

Management uses these metrics to analyze historical segment financial results and as the key inputs for forecasting and budgeting segment financial results.

See — Non-GAAP Measurements below for a reconciliation of segment operating income (loss) to direct margin.

(3) Defined as the number of contractual days for owned and leased rigs with recognized revenue during the period.

(4) Active rigs generate revenue for the Company;

accordingly, 'average active rigs' represents the average number of rigs generating revenue during the applicable time period.

This metric is calculated by dividing revenue days by total days in the applicable period (i.e., 90 days).

(5) Defined as the number of rigs generating revenue at the applicable end date of the time period.

Operating Revenues Operating revenues were $171.4 million and $149.1 million in the three months ended March 31, 2026 and 2025, respectively.

The increase was primarily driven by $19.1 million of incremental operating revenues resulting from an additional 15 days of KCA Deutag operations during the three months ended March 31, 2026.

Direct Operating Expenses Direct operating expenses increased to $144.5 million during the three months ended March 31, 2026 as compared to $122.9 million during the three months ended March 31, 2025.

The increase was primarily driven by $20.6 million of incremental direct operating expenses resulting from an additional 15 days of KCA Deutag operations during the three months ended March 31, 2026.

Other Operations

Results of our other operations, excluding corporate selling, general and administrative costs, and corporate depreciation, are as follows:

Three Months Ended March 31,

(in thousands) 2026 2025 % Change

Operating revenues $ 48,607 $ 45,524 6.8 %

Direct operating expenses 50,617 43,088 17.5

Depreciation and amortization

1,900 1,531 24.1

Selling, general and administrative expense 3,325 2,259 47.2

Acquisition transaction and integration costs

Operating loss

$ (7,397) $ (1,375) (438.0)

Operating Revenues We continue to use our Captive insurance companies to insure the deductibles for our domestic workers’ compensation, general liability, automobile liability claims programs, and medical stop-loss program and to insure the deductibles from the Company's international casualty and rig property programs.

Operating revenues of $48.6 million and $45.5 million during the three months ended March 31, 2026 and 2025, respectively, consisted of $19.5 million and $17.9 million in intercompany premium revenues recorded by the Captives, respectively.

These revenues were eliminated upon consolidation.

Dur ing the three months ended March 31, 2026 and 2025, operating revenues also consisted of $26.4 million and $24.7 million from BENTEC's manufacturing and engineering operations, respectively, of which, $3.2 million and $7.9 million are related to intercompany revenues that were eliminated upon consolidation, respectively.

Q2 FY26 FORM 10-Q | 37

Direct Operating Expenses Direct operating expenses of $50.6 million and $43.1 million during the three months ended March 31, 2026 and 2025, respectively, consisted of $3.7 million and $10.3 million, respectively, in adjustments to accruals for estimated losses allocated to the Captives, rig and casualty insurance premiums of $11.8 million and $11.2 million, respectively, and medical stop loss expenses of $4.1 million and $5.2 million, respectively.

The change to accruals for estimated losses was primarily due to actuarial valuation adjustments by our third-party actuary.

During the three months ended March 31, 2026, direct operating expenses also consisted of $26.9 million from BENTEC's manufacturing and engineering operations, of which $3.2 million is related to intercompany expenses that were eliminated in consolidation.

During the three months ended March 31, 2025, direct operating expenses also consisted of $12.2 million from BENTEC's manufacturing and engineering operations.

Results of Operations for the Six Months Ended March 31, 2026 and 2025

It is important to note that results presented for the six months ended March 31, 2025 reflect a full 182 days of H&P operations and 75 days of KCA Deutag operations, as the Acquisition was completed on January 16, 2025.

Consolidated Results of Operations

Net Income (Loss) Attributable to Helmerich & Payne Inc.

We recorded a loss of $155.3 million ($(1.57) diluted share) for the six months ended March 31, 2026 compared to income of $56.4 million ($0.56 diluted share) for the six months ended March 31, 2025.

Operating Revenue During the six months ended March 31, 2026 and 2025, consolidated operating revenues were $1.9 billion and $1.7 billion, respectively.

The increase was primarily driven by completion of the Acquisition, resulting in an additional $352.8 million of revenue during the six months ended March 31, 2026.

The increase was partially offset by lower activity levels in the North America Solutions segment.

Direct Operating Expenses, Excluding Depreciation and Amortization Direct operating expenses were $1.3 billion and $1.1 billion for the six months ended March 31, 2026 and 2025, respectively.

The increase was primarily driven by completion of the Acquisition, resulting in an additional $296.5 million of direct operating expenses during the six months ended March 31, 2026.

The increase was partially offset by lower activity levels in the North America Solutions segment.

Other Operating Expenses Other operating expenses were $56.1 million and $4.6 million for the six months ended March 31, 2026 and 2025, respectively.

The increase was primarily driven by completion of the Acquisition, resulting in an additional $51.3 million of costs associated with BENTEC™ manufacturing and engineering operations during the six months ended March 31, 2026.

Depreciation and Amortization Expense Depreciation and amortization expense increased to $362.7 million during the six months ended March 31, 2026 compared to $256.7 million during the six months ended March 31, 2025.

The increase was primarily driven by completion of the Acquisition, resulting in an additional $101.6 million of depreciation and amortization expense during the six months ended March 31, 2026.

Selling, General and Administrative Expense Selling, general and administrative expenses decreased to $141.5 million during the six months ended March 31, 2026 compared to $143.9 million during the six months ended March 31, 2025.

Asset Impairment Charges Dur ing the six months ended March 31, 2026, we recorded a non-cash impairment charge of $129.2 million primarily related to certain assets that were reclassified as held‑for‑sale within our North America Solutions, International Solutions, and Offshore Solutions segments.

The reclassifications required us to adjust the assets to their fair value, which corresponded to their scrap value, resulting in the impairment.

See Note 3—Property, Plant and Equipment for additional details related to the impairment charges.

Interest Expense Interest expenses were $51.4 million and $50.6 million for the six months ended March 31, 2026 and 2025, respectively.

See Note 5—Debt for additional details related to our debt agreements.

Gain on Investment Securities During the six months ended March 31, 2026, we recognized an aggregate gain of $15.3 million on investment securities.

The aggregate gain primarily consisted of a $21.0 million gain on our investment in Tamboran due to a change in the fair value of the investment.

The gain was partially offset by a $5.0 million loss on a geothermal equity security due to a change in the fair value of the investment.

During the six months ended March 31, 2025, we recognized an aggregate gain of $14.4 million on investment securities.

The aggregate gain primarily consisted of $14.4 million, $10.2 million, and $2.1 million of gains on various geothermal investments, our investment in Galileo, and our investment in Tamboran, respectively, due to changes in the fair value of the investments.

The gain was partially offset by a $12.4 million loss on our sale of equity investments in ADNOC Drilling.

Q2 FY26 FORM 10-Q | 38

Income Taxes For the six months ended March 31, 2026, we recorded income tax expense of $20.5 million (which includes a discrete tax expense of $4.8 million primarily related to equity compensation and unrecognized tax benefits) compared to income tax expense of $63.1 million (which includes a discrete tax expense of $0.7 million related to equity compensation) for the six months ended March 31, 2025.

Our statutory federal income tax rate for fiscal year 2026 and 2025 is 21.0 percent (before incremental state and foreign taxes).

North America Solutions

Three Months Ended December 31,

Six Months Ended March 31,

(in thousands, except operating statistics) 2026 2025 % Change

4 unchanged sentences

Selling, general and administrative expense 27,423 31,294 (12.4)

Acquisition transaction and integration costs

Asset impairment charges 97,922 1,507 6,397.8

Restructuring charges

Segment operating income $ 147,543 $ 304,154 (51.5)

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(5) Defined as the number of rigs generating revenue at the applicable end date of the time period.

Operating Revenues Operating revenues were $563.9 million and $598.1 million in the three months ended December 31, 2025 and 2024, respectively.

Operating Revenues Operating revenues were $1.1 billion and $1.2 billion in the six months ended March 31, 2026 and 2025, respectively.

The decrease in operating revenues was primarily due to lower activity levels and per revenue day pricing levels.

Direct Operating Expenses Direct operating expenses decreased to $325.1 million during the three months ended December 31, 2025 as compared to $332.3 million during the three months ended December 31, 2024.

This decrease was primarily due to lower activity levels.

Asset Impairment Charges Dur ing the three months ended December 31, 2025, we recorded a non-cash impairment charge of $97.9 million related to certain assets that were reclassified as held‑for‑sale.

Direct Operating Expenses Direct operating expenses decreased to $627.2 million during the six months ended March 31, 2026 as compared to $666.4 million during the six months ended March 31, 2025.

This decrease was primarily due to lower activity levels as discussed above.

Depreciation and Amortization Expense Depreciation expense decreased to $167.2 million during the six months ended March 31, 2026 compared to $175.5 million during the six months ended March 31, 2025.

The decrease was primarily driven by a reduction in depreciable asset balances associated with the reclassification of assets to held‑for‑sale during the first quarter of fiscal year 2026.

See Note 3—Property, Plant and Equipment for additional details related to our held-for-sale assets.

Asset Impairment Charges Dur ing the six months ended March 31, 2026, we recorded a non-cash impairment charge of $97.9 million primarily related to certain assets that were reclassified as held‑for‑sale.

The reclassification required us to adjust the assets to their fair value, which corresponded to their scrap value, resulting in the impairment.

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International Solutions

Three Months Ended December 31,

Six Months Ended March 31,

(in thousands, except operating statistics) 2026 2025 % Change

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Selling, general and administrative expense 8,394 7,254 15.7

Acquisition transaction costs

Acquisition transaction and integration costs

1,634 210 678.1

Asset impairment charges 26,101 — —

Restructuring charges 1,620 — —

Segment operating loss $ (154,917) $ (49,467) (213.2)

$ (55,305) $ (14,484) (281.8)

Financial Data and Other Operating Statistics 1 :

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(5) Defined as the number of rigs generating revenue at the applicable end date of the time period.

Operating Revenues Operating revenues were $234.3 million and $47.5 million in the three months ended December 31, 2025 and 2024, respectively.

The $186.8 million increase in operating revenues was primarily driven by an additional $154.2 million in revenue generated from expanded operations following the Acquisition, and an additional $23.0 million in revenue from increased FlexRig ® activity in Saudi Arabia.

Direct Operating Expenses Direct operating expenses increased to $205.6 million during the three months ended December 31, 2025 as compared to $54.4 million during the three months ended December 31, 2024.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $136.3 million in direct operating expenses during the three months ended December 31, 2025.

Operating Revenues Operating revenues were $452.6 million and $295.4 million in the six months ended March 31, 2026 and 2025, respectively.

The $157.2 million increase in operating revenues was primarily driven by additional $110.3 million in revenue generated from expanded operations following the Acquistion, and an additional $35.6 million in revenue from increased FlexRig ® activity in Saudi Arabia, which began operations during the first quarter of fiscal year 2025.

Direct Operating Expenses Direct operating expenses increased to $412.4 million during the six months ended March 31, 2026 as compared to $275.4 million during the six months ended March 31, 2025.

The increase was primarily driven by completion of the Acquisition, resulting in an additional $124.0 million in direct operating expenses.

Additionally, direct operating expenses increased by $5.4 million attributable to increased FlexRig ® activity in Saudi Arabia.

Depreciation and Amortization Expense Depreciation expense increased to $78.1 million during the three months ended December 31, 2025 compared to $4.8 million during the three months ended December 31, 2024.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $67.4 million in depreciation and amortization expense during the three months ended December 31, 2025.

Depreciation and Amortization Expense Depreciation expense increased to $157.4 million during the six months ended March 31, 2026 compared to $62.0 million during the six months ended March 31, 2025.

The increase was primarily driven by completion of the Acquisition, resulting in an additional $86.4 million in depreciation and amortization expense during the six months ended March 31, 2026.

Asset Impairment Charges Dur ing the six months ended March 31, 2026, we recorded a non-cash impairment charge of $26.1 million primarily related to certain assets that were reclassified as held‑for‑sale.

The reclassification required us to adjust the assets to their fair value, which corresponded to their scrap value, resulting in the impairment.

See Note 3—Property, Plant and Equipment for additional details related to the impairment charges.

Q2 FY26 FORM 10-Q | 40

Offshore Solutions

Three Months Ended December 31,

Six Months Ended March 31,

(in thousands, except operating statistics) 2026 2025 % Change

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Selling, general and administrative expense 3,698 2,028 82.3

Acquisition transaction costs

Acquisition transaction and integration costs

925 60 1,441.7

Asset impairment charges 2,128 — —

Segment operating income $ 30,452 $ 20,880 45.8

$ 16,437 $ 3,505 369.0

Financial Data and Other Operating Statistics 1 :

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(5) Defined as the number of rigs generating revenue at the applicable end date of the time period.

Operating Revenues Operating revenues were $188.3 million and $29.2 million in the three months ended December 31, 2025 and 2024, respectively.

Operating Revenues Operating revenues were $359.7 million and $178.3 million in the six months ended March 31, 2026 and 2025, respectively.

The $181.4 million increase in operating revenues was primarily driven by an additional $174.2 million in revenue generated from expanded operations following the Acquisition.

Direct Operating Expenses Direct operating expenses increased to $157.3 million during the three months ended December 31, 2025 as compared to $22.7 million during the three months ended December 31, 2024.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $134.1 million in direct operating expenses during the three months ended December 31, 2025.

Depreciation and Amortization Expense Depreciation expense increased to $10.8 million during the three months ended December 31, 2025 compared to $2.0 million during the three months ended December 31, 2024.

The increase was primarily driven by the completion of the Acquisition, resulting in an additional $9.6 million in depreciation and amortization expense during the three months ended December 31, 2025.

Asset Impairment Charges Dur ing the three months ended December 31, 2025, we recorded a non-cash impairment charge of $2.1 million related to certain assets that were reclassified as held‑for‑sale.

Direct Operating Expenses Direct operating expenses increased to $301.8 million during the six months ended March 31, 2026 as compared to $145.6 million during the six months ended March 31, 2025.

The increase was primarily driven by completion of the Acquisition, resulting in an additional $154.7 million in direct operating expenses during the six months ended March 31, 2026.

Depreciation and Amortization Expense Depreciation expense increased to $20.7 million during the six months ended March 31, 2026 compared to $9.8 million during the six months ended March 31, 2025.

The increase was primarily driven by completion of the Acquisition, resulting in an additional $12.2 million of depreciation and amortization expense during the six months ended March 31, 2026.

Asset Impairment Charges Dur ing the six months ended March 31, 2026, we recorded a non-cash impairment charge of $2.1 million related to certain assets that were reclassified as held‑for‑sale.

The reclassification required us to adjust the assets to their fair value, which corresponded to their scrap value, resulting in the impairment.

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Results of our other operations, excluding corporate selling, general and administrative costs, and corporate depreciation, are as follows:

Three Months Ended December 31,

Six Months Ended March 31,

(in thousands) 2026 2025 % Change

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Selling, general and administrative expense 7,086 2,628 169.6

Acquisition transaction costs

Acquisition transaction and integration costs

306 21 1,357.1

Asset impairment charges

Restructuring charges

Operating income (loss)

Operating loss

$ (8,620) $ (601) (1,334.3)

Operating revenues of $57.9 million and $19.3 million during the three months ended December 31, 2025 and 2024, respectively, consisted of $18.4 million and $16.6 million, respectively, in intercompany premium revenues recorded by the Captives.

Operating revenues of $106.5 million and $64.8 million during the six months ended March 31, 2026 and 2025, respectively, consisted of $37.9 million and $34.5 million in intercompany premium revenues recorded by the Captives, respectively.

These revenues were eliminated upon consolidation.

Dur ing the three months ended December 31, 2025, operating revenues also consisted of $36.9 million from BENTEC's manufacturing and engineering operations, of which, $3.6 million is related to intercompany revenues that were eliminated upon consolidation.

Direct Operating Expenses Direct operating expenses of $49.7 million and $17.7 million during the three months ended December 31, 2025 and 2024, respectively, consisted of $3.5 million and $3.9 million, respectively, in adjustments to accruals for estimated losses allocated to the Captives, rig and casualty insurance premiums of $11.5 million and $10.5 million, respectively, and medical stop loss expenses of $2.6 million and $5.2 million, respectively.

Dur ing the six months ended March 31, 2026 and 2025, operating revenues also consisted of $63.3 million and $24.7 million from BENTEC's manufacturing and engineering operations, respectively, of which, $6.8 million and $7.9 million are related to intercompany revenues that were eliminated upon consolidation, respectively.

Direct Operating Expenses Direct operating expenses of $100.3 million and $60.8 million during the six months ended March 31, 2026 and 2025, respectively, consisted of $2.1 million and $14.2 million, respectively, in adjustments to accruals for estimated losses allocated to the Captives, rig and casualty insurance premiums of $23.3 million and $21.7 million, respectively, and medical stop loss expenses of $6.7 million and $10.4 million, respectively.

The change to accruals for estimated losses was primarily due to actuarial valuation adjustments by our third-party actuary.

During the three months ended December 31, 2025, direct operating expenses also consisted of $33.7 million from BENTEC's manufacturing and engineering operations, of which $3.6 million is related to intercompany expenses that were eliminated in consolidation.

Asset Impairment Charges Dur ing the three months ended December 31, 2025, we recorded a non-cash impairment charge of $3.0 million associated with previously capitalized in-process research and development expenses that were determined to have no alternative future use.

During the six months ended March 31, 2026, direct operating expenses also consisted of $60.6 million from BENTEC's manufacturing and engineering operations, of which $6.8 million is related to intercompany expenses that were eliminated in consolidation.

During the six months ended March 31, 2025, direct operating expenses also consisted of $12.2 million from BENTEC's manufacturing and engineering operations.

Asset Impairment Charges Dur ing the six months ended March 31, 2026, we recorded a non-cash impairment charge of $3.0 million associated with previously capitalized in-process research and development expenses that were determined to have no alternative future use.

Liquidity and Capital Resources

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Our sources of available liquidity include existing cash balances on hand, cash flows from operations, and availability under the Amended Credit Facility.

Our liquidity requirements include meeting ongoing working capital needs, funding our capital expenditure projects, paying dividends declared, repaying our outstanding indebtedness, and funding the Acquisition.

Our liquidity requirements include meeting ongoing working capital needs, funding our capital expenditure projects, paying dividends declared, and repaying our outstanding indebtedness.

Historically, we have financed operations primarily through internally generated cash flows.

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As our revenues increase, net working capital is typically a use of capital, while conversely, as our revenues decrease, net working capital is typically a source of capital.

Net working capital (defined as current assets less current liabilities) was $740.5 million and $650.6 million as of December 31, 2025 and September 30, 2025, respectively.

As of December 31, 2025, we had cash and cash equivalents of $247.2 million and short-term investments of $21.8 million.

Our cash flows for the three months ended December 31, 2025, and 2024 are presented below:

Three Months Ended

Net working capital (defined as current assets less current liabilities) was $609.4 million and $650.6 million as of March 31, 2026 and September 30, 2025, respectively.

As of March 31, 2026, we had cash and cash equivalents of $177.2 million and short-term investments of $22.0 million.

Our cash flows for the six months ended March 31, 2026, and 2025 are presented below:

Six Months Ended

(in thousands) 2026 2025

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Effect of exchange rate changes on cash, cash equivalents and restricted cash (471) 6,406

Net increase in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

$ (21,867) $ (1,283,606)

Operating Activities

Cash flows provided by operating activities was $182.4 million and $158.4 million for the three months ended December 31, 2025 and 2024, respectively.

Cash flows provided by operating activities were $219.0 million and $214.4 million for the six months ended March 31, 2026 and 2025, respectively.

The change in cash provided by operating activities is primarily attributable to increased activity resulting from the completion of the Acquisition.

Net cash outflows related to the change in working capital was $17.9 million and $0.1 million for the three months ended December 31, 2025 and 2024, respectively.

Net cash outflows related to the change in working capital was $107.8 million and $55.0 million for the six months ended March 31, 2026 and 2025, respectively.

Investing Activities

Capital Expenditures Our capital expenditures during the three months ended December 31, 2025 were $67.6 million compared to $106.5 million during the three months ended December 31, 2024.

Capital Expenditures Our capital expenditures during the six months ended March 31, 2026 were $130.4 million compared to $265.2 million during the six months ended March 31, 2025.

The decrease in capital expenditures is driven by lower equipment overhauls and certain long-term projects.

Net Purchases and Sales of Short-Term Investments Our net purchases of short-term investments during the three months ended December 31, 2025 were $1.4 million compared to net sales of $147.0 million during the three months ended December 31, 2024.

The activity during the three months ended December 31, 2024 is primarily driven by $193.3 million of net proceeds received from the liquidation of shares in ADNOC Drilling and our ongoing liquidity management.

Sale of Assets Our proceeds from asset sales during the three months ended December 31, 2025 were $11.0 million compared to proceeds of $12.1 million during the three months ended December 31, 2024.The decrease in proceeds is mainly driven by lower reimbursement from customers for lost or damaged drill pipe and other used drilling equipment.

Net Purchases and Sales of Short-Term Investments Our net purchases of short-term investments during the six months ended March 31, 2026 were $2.0 million compared to net sales of $261.6 million during the six months ended March 31, 2025.

The activity during the six months ended March 31, 2025 is primarily driven by $193.3 million of net proceeds received from the liquidation of shares in ADNOC Drilling and our ongoing liquidity management.

Payment for the Acquisition of Business, Net of Cash Received During the six months ended March 31, 2025, H&P completed the Acquisition by paying approximately $2.0 billion in cash.

This included acquiring $196.7 million in cash and cash equivalents, resulting in a net cash payment of $1.8 billion.

Sale of Assets Our proceeds from asset sales during the six months ended March 31, 2026 were $21.8 million compared to proceeds of $26.1 million during the six months ended March 31, 2025.

The decrease in proceeds is mainly driven by lower reimbursement from customers for lost or damaged drill pipe and other used drilling equipment.

Financing Activities

Dividends We paid cash dividends of $0.25 per share during the three months ended December 31, 2025 and 2024.

Total dividends paid were $25.2 million and $25.0 million during the three months ended December 31, 2025 and 2024, respectively.

Debt Payments During the three months ended December 31, 2025, the Company repaid $30.0 million of the outstanding balance on the Term Loan Credit Agreement.

Additionally, the Company repaid an aggregate of $1.7 million under its 2024 and 2023 Oman facilities.

Dividends We paid cash dividends of $0.50 per share during the six months ended March 31, 2026 and 2025.

Total dividends paid were $50.7 million and $50.3 million during the six months ended March 31, 2026 and 2025, respectively.

Debt Issuance Proceeds On January 16, 2025, we received $400.0 million of proceeds from the Term Loan Credit Agreement.

During the six months ended March 31, 2025 , the Company received the final draw down of $1.4 million on the 2024 Oman facility.

The receipt of funds from the 2024 Oman facility is reflected in Other within cash flows from financing activities of the Unaudited Condensed Consolidated Statements of Cash Flows.

For additional information regarding debt issuance, refer to Note 5—Debt.

Q2 FY26 FORM 10-Q | 43

Debt Payments During the six months ended March 31, 2026, the Company repaid $60.0 million of the outstanding balance on the Term Loan Credit Agreement compared to $25.0 million repaid d uring the six months ended March 31, 2025.

Additionally, during the six months ended March 31, 2026, the Company repaid an aggregate of $3.4 million under its 2024 and 2023 Oman facilities compared to an aggregate of $1.7 million repaid d uring the six months ended March 31, 2025.

The repayments for the Oman facilities are reflected in Other within cash flows from financing activities of the Unaudited Condensed Consolidated Statements of Cash Flows.

For additional information regarding debt issuance and repayment, refer to Note 5—Debt.

Q1 FY26 FORM 10-Q | 37

Senior Notes Issued in Fiscal Year 2024

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On the Closing Date, the Company drew an aggregate principal amount of $400.0 million under the Term Loan Credit Agreement for purposes of financing the Acquisition.

The Term Loan Credit Agreement matures at the two-year anniversary of the funding of the term loans unless earlier terminated pursuant to the terms of the Term Loan Credit Agreement.

The Term Loan Credit Agreement matures at the two-year anniversary of the funding of the term loan unless earlier terminated pursuant to the terms of the Term Loan Credit Agreement.

On January 16, 2025, H&P completed the Acquisition, and the Company used the proceeds from the Term Loan Credit Agreement, together with the net proceeds from the Notes, and cash on hand, to finance the purchase price for the Acquisition, to repay or redeem certain of KCA Deutag's outstanding indebtedness, and to pay related fees and expenses.

During the three months ended December 31, 2025, the Company repaid $30.0 million of the outstanding balance on the Term Loan Credit Agreement.

As such, the outstanding balance as of December 31, 2025, was $170.0 million.

In January 2026, we repaid $30.0 million, decreasing the outstanding balance on the Term Loan Credit Agreement to $140.0 million.

During the three and six months ended March 31, 2026, the Company repaid $30.0 million and $60.0 million of the outstanding balance on the Term Loan Credit Agreement, respectively.

As the debt was scheduled to mature in January 2027, the outstanding balance as of March 31, 2026, in the amount of $140.0 million, was reclassified to Current portion of long-term debt, net on the Unaudited Condensed Consolidated Balance Sheet as of March 31, 2026.

In April 2026, we repaid the remaining $140.0 million balance outstanding on the Term Loan Credit Agreement.

Q2 FY26 FORM 10-Q | 44

The benchmark rate is the Secured Overnight Financing Rate ("SOFR").

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Commitment fees for both rates range from 0.10 percent to 0.250 percent per annum.

Based on the unsecured debt rating of the Company on December 31, 2025, the spread over SOFR was 1.375 percent and commitment fees were 0.175 percent.

As of December 31, 2025, the interest rate on the Term Loan Credit Agreement was 5.205 percent per annum.

The weighted average variable interest rate on all amounts outstanding under the Term Loan Credit Agreement was 5.494 percent for the three months ended December 31, 2025.

Q1 FY26 FORM 10-Q | 38

Based on the unsecured debt rating of the Company on March 31, 2026, the spread over SOFR was 1.375 percent and commitment fees were 0.175 percent.

As of March 31, 2026, the interest rate on the Term Loan Credit Agreement was 5.143 percent per annum.

The weighted average variable interest rate on all amounts outstanding under the Term Loan Credit Agreement was 5.166 percent and 5.339 percent for the three and six months ended March 31, 2026, respectively.

2024 Oman Facility

The 2024 Oman Facility provides for term loan borrowings of $45.5 million, which was originally fully drawn, but subsequently reduced by quarterly debt repayments.

During the fiscal year ended September 30, 2025, our 2024 Oman Facility was amended to bear interest payable quarterly at a fixed rate of 6.00 percent per annum for two years and thereafter, at a rate that is the higher of (x) 5.00 percent and (y) the reference rate specified in the 2024 Oman Facility plus 1.75 percent.

During the three months ended December 31, 2025, the Company repaid $0.9 million of the outstanding balance on the facility.

Of the $42.2 million borrowings outstanding at December 31, 2025, a total of $3.4 million is payable within one year.

These secured bank loans are wholly denominated in Omani rial.

1 unchanged sentence

The commitments under the 2024 Oman Facility mature December 31, 2034.

During the three and six months ended March 31, 2026, the Company repaid $0.8 million and $1.7 million of the outstanding balance on the facility, respectively.

Of the $41.4 million borrowings outstanding at March 31, 2026, a total of $3.4 million is payable within one year.

There is an annual financial covenant in the 2024 Oman Facility that requires KCAD Energy to maintain a debt service coverage ratio of at least 1.20:1.00.

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The 2023 Oman Facility provides for term loan borrowings of $45.6 million, which was originally fully drawn, but subsequently reduced by quarterly debt repayments.

During the fiscal year ended September 30, 2025, our 2023 Oman Facility was amended to bear interest payable quarterly at a fixed rate of 6.00 percent per annum for two years and thereafter, at a rate that is the higher of (x) 5.00 percent and (y) the reference rate specified in the 2023 Oman Facility plus 1.75 percent.

During the three months ended December 31, 2025, the Company repaid $0.9 million of the outstanding balance on the facility.

Of the $38.9 million borrowings outstanding at December 31, 2025, a total of $3.4 million is payable within one year.

These secured bank loans are wholly denominated in Omani rial.

1 unchanged sentence

The commitments under the 2023 Oman Facility mature December 31, 2033.

During the three and six months ended March 31, 2026, the Company repaid $0.8 million and $1.7 million of the outstanding balance on the facility, respectively.

Of the $38.1 million borrowings outstanding at March 31, 2026, a total of $3.4 million is payable within one year.

There is an annual financial covenant in the 2023 Oman Facility that requires KCAD Energy to maintain a debt service coverage ratio of at least 1.20:1.00.

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Commitments under the Amended Credit Facility may be increased by up to $100.0 million, subject to the agreement of the Company and new or existing Revolving Credit Agreement Lenders.

The proceeds of the loans made under the Amended Credit Facility may be used by the Company for (i) working capital and other general corporate purposes, (ii) for the payment of fees and expenses related to the entering into of the Amended Credit Facility and the other credit documents and (iii) for the refinancing of the extensions of credit under the Existing Credit Agreement.

Q2 FY26 FORM 10-Q | 45

The benchmark rate is the SOFR.

6 unchanged sentences

Commitment fees for both rates range from 0.075 percent to 0.200 percent per annum.

Based on the unsecured debt rating of the Company on December 31, 2025, the spread over SOFR would have been 1.250 percent had borrowings been outstanding under the Amended Credit Facility and commitment fees would have been 0.150 percent.

Based on the unsecured debt rating of the Company on March 31, 2026, the spread over SOFR would have been 1.250 percent had borrowings been outstanding under the Amended Credit Facility and commitment fees would have been 0.150 percent.

There is a financial covenant in the Amended Credit Facility that requires us to maintain a total funded debt to total capitalization ratio of less than or equal to 55.0 percent.

The Amended Credit Facility contains additional terms, conditions, restrictions and covenants that we believe are usual and customary in unsecured debt arrangements for companies of similar size and credit quality, including a limitation that priority debt (as defined in the credit agreement) may not exceed 17.5 percent of the net worth of the Company.

As of December 31, 2025, there were no borrowings or letters of credit outstanding, leaving $950.0 million available to borrow under the Amended Credit Facility.

As of December 31, 2025, we had $420.0 million in uncommitted bilateral credit facilities, for the purpose of obtaining the issuance of international letters of credit, bank guarantees, and performance bonds.

Of the $420.0 million, $227.8 million was outstanding as of December 31, 2025.

As of March 31, 2026, there were no borrowings or letters of credit outstanding, leaving $950.0 million available to borrow under the Amended Credit Facility.

As of March 31, 2026, we had $420.0 million in uncommitted bilateral credit facilities, for the purpose of obtaining the issuance of international letters of credit, bank guarantees, and performance bonds.

Of the $420.0 million, $234.4 million was outstanding as of March 31, 2026.

The applicable agreements for all unsecured debt contain additional terms, conditions and restrictions that we believe are usual and customary in unsecured debt arrangements for companies that are similar in size and credit quality.

At December 31, 2025, we were in compliance with all debt covenants.

At March 31, 2026, we were in compliance with all debt covenants.

Future Cash Requirements

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If needed, we may decide to obtain additional funding from our $950.0 million Amended Credit Facility.

Our indebtedness under our unsecured senior notes totaled $1.8 billion at December 31, 2025 and comprised of the following maturities:

Our indebtedness under our unsecured senior notes totaled $1.8 billion at March 31, 2026 and comprised of the following maturities:

$350.0 million due December 2027, $350.0 million due December 2029, $550.0 million due September 2031, and $550.0 million due December 2034.

Our indebtedness under our unsecured term loan credit agreement totaled $170.0 million at December 31, 2025 and matures in January 2027.

Our indebtedness under our secured term loan credit agreements totaled $81.2 million at December 31, 2025, of which $6.9 million is due within one year, and the remaining balance is required to be paid on a quarterly basis through the respective maturity dates of December 2033 and December 2034.

This debt is allocated specifically to finance the ongoing rig construction activities in Oman.

As of December 31, 2025, we had a $631.1 million deferred tax liability on our Unaudited Condensed Consolidated Balance Sheets, primarily related to temporary differences between the financial and income tax basis of property, plant and equipment.

Our indebtedness under our unsecured term loan credit agreement totaled $140.0 million at March 31, 2026 and was fully repaid in April 2026.

Our indebtedness under our secured term loan credit agreements totaled $79.5 million at March 31, 2026, of which $6.9 million is due within one year, and the remaining balance is required to be paid on a quarterly basis through the respective maturity dates of December 2033 and December 2034.

This debt was allocated specifically to finance rig construction activities in Oman.

As of March 31, 2026, we had a $617.9 million deferred tax liability on our Unaudited Condensed Consolidated Balance Sheets, primarily related to temporary differences between the financial and income tax basis of property, plant and equipment.

Our capital expenditures over the last several years have been subject to accelerated depreciation methods (including bonus depreciation) available under the Internal Revenue Code of 1986, as amended, enabling us to defer a portion of cash tax payments to future years.

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We expect to be able to meet any such obligations utilizing cash and investments on hand, as well as cash generated from ongoing operations.

As of December 31, 2025, we have recorded unrecognized tax benefits and related interest and penalties of approximately $18.8 million.

As of March 31, 2026, we have recorded unrecognized tax benefits and related interest and penalties of approximately $18.9 million.

Material Commitments

Material commitments as reported in our 2025 Annual Report on Form 10-K have not changed significantly as of December 31, 2025, other than those disclosed in Note 5—Debt and Note 11—Commitments and Contingencies to the Unaudited Condensed Consolidated Financial Statements.

Material commitments as reported in our 2025 Annual Report on Form 10-K have not changed significantly as of March 31, 2026, other than those disclosed in Note 5—Debt and Note 11—Commitments and Contingencies to the Unaudited Condensed Consolidated Financial Statements.

As stated in Note 13—Subsequent Events, subsequent to March 31, 2026, the Company fully repaid the remaining balance of $ 140.0 million outstanding under the Term Loan Credit Agreement.

As a result of this repayment, no amounts remain outstanding under the Term Loan Credit Agreement.

Q2 FY26 FORM 10-Q | 46

Critical Accounting Policies and Estimates

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Based on management's evaluation, there have been no material changes in these critical accounting policies and estimates.

Q1 FY26 FORM 10-Q | 40

Recently Issued Accounting Standards

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GAAP that is most directly comparable to direct margin.

Three Months Ended

December 31, December 31,

Three Months Ended Six Months Ended

March 31, March 31, March 31, March 31,

(in thousands) 2026 2025 2026 2025

4 unchanged sentences

Selling, general and administrative expense 13,401 15,484 27,423 31,294

Acquisition transaction and integration costs

Asset impairment charges — 1,507 97,922 1,507

Restructuring charges

Direct margin (Non-GAAP) $ 215,207 $ 265,621 $ 454,012 $ 531,419

1 unchanged sentence

Segment operating loss $ (99,612) $ (34,983) $ (154,917) $ (49,467)

$ (55,305) $ (14,484)

Depreciation and amortization 79,257 57,153 157,378 61,981

Selling, general and administrative expense 4,249 4,546 8,394 7,254

Acquisition transaction costs 436 —

Acquisition transaction and integration costs

1,198 210 1,634 210

Asset impairment charges 26,101 — 26,101 —

Restructuring charges

302 — 1,620 —

Direct margin (Non-GAAP) $ 11,495 $ 26,926 $ 40,210 $ 19,978

3 unchanged sentences

Selling, general and administrative expense 2,654 964 3,698 2,028

Acquisition transaction costs 573 —

Acquisition transaction and integration costs

352 60 925 60

Asset impairment charges — — 2,128 —

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis