What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-23 compared with 2025-04-23 · 198 added, 104 removed, 230 unchanged (57% of the section changed)

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Therefore, our financial results can be significantly affected by oil and natural gas prices as well as rig counts.

As shown in the following tables, as of March 31, 2025 oil prices and rig counts were notably lower than at March 31, 2024.

The drop in oil prices and rig counts since the quarter ended March 31, 2024 has coincided with reduced activity levels across our industry.

As shown in the following tables, as of June 30, 2025 oil prices and rig counts were notably lower than at June 30, 2024.

The drop in oil prices and rig counts since June 30, 2024 has coincided with reduced activity levels across our industry.

Although Henry Hub natural gas prices increased in 2025, gas rig counts in the first six months of 2025 remained below the levels of the first six months of 2024.

Gas production additions were sourced from a backlog of drilled but uncompleted wells and deferred start-ups.

Oil prices and rig counts may continue to trend lower throughout the remainder of 2025, resulting in flat to lower activity levels.

In addition to the impact of lower commodity prices and reduced rig counts there may be future impacts and effects on our industry or us relating to the new U.S.

Presidential administration and Congress in areas relating to trade policy and tariffs, global conflicts and sanctions, environmental regulations and others.

For example, on April 2, 2025, the U.S.

announced sweeping new tariffs, prompting retaliatory actions by affected countries, followed by a 90-day pause in the effectiveness of some tariffs.

We have seen significant volatility in the energy markets subsequent to the tariff announcements, including a continued decline in oil prices, and anticipate increased supply chain challenges, as well as increased economic pressures on our customers.

The Company continues to monitor these developments, but the impact and timing of these changes on our business is uncertain.

In addition to the impact of lower commodity prices and reduced rig counts, there may be future impacts and effects on our industry or us relating to the U.S.

Presidential administration and Congress, in areas such as trade policy and tariffs, global conflicts and sanctions, environmental regulations and others.

For example, the U.S.

Presidential administration announced sweeping new tariffs in early 2025 that prompted retaliatory actions by affected countries.

Various modifications and delays have been announced to some of the new tariffs and further changes are expected to be made in the future.

Since the tariff announcements, energy markets have been volatile.

Trade disputes have had, and may continue to have, an adverse impact on the overall macroeconomic environment and may result in supply chain challenges and heightened economic pressure on our customers.

The Company continues to monitor these developments, however the future impact and timing of these changes on our business remains uncertain and will depend on several factors, including whether additional or incremental tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures.

The table below shows the average oil and natural gas prices for West Texas Intermediate (“WTI”), Brent North Sea (“Brent”) crude oil and Henry Hub natural gas.

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Oil price - WTI (1)

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The table below shows historical average rig counts based on the weekly Baker Hughes Company rig count information.

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

North America 699 738 751 785

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In February 2022, the military conflict between Russia and Ukraine (“Russia Ukraine Conflict”) began and in response we evaluated, and continue to evaluate, our operations, with the priority being centered on the safety and well-being of our employees in the impacted regions, as well as operating in full compliance with applicable international laws and sanctions.

Revenues in Russia were approximately 6% of our total revenues for the three months ended March 31, 2025, compared to 5% of our total revenue for the three months ended March 31, 2024.

As of March 31, 2025, our Russia operations included $113 million in cash, $131 million in other current assets, $72 million in property, plant and equipment and other non-current assets, and $53 million in liabilities.

Revenues in Russia were approximately 7% of our total revenues for the three and six months ended June 30, 2025, compared to 5% of our total revenue for the three and six months ended June 30, 2024.

As of June 30, 2025, our Russia operations included $103 million in cash, $151 million in other current assets, $78 million in property, plant and equipment and other non-current assets, and $67 million in liabilities.

As of December 31, 2024, our Russia operations included $82 million in cash, $95 million in other current assets, $56 million in property, plant and equipment and other non-current assets, and $45 million in liabilities.

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Consolidated Statements of Operations - Operating Summary

Revenues of $1.2 billion in the three months ended March 31, 2025, decreased 12% compared to $1.4 billion in the three months ended March 31, 2024.

Year-over-year in the first quarter, product revenues decreased 8% and service revenues decreased 14%.

Revenues of $1.2 billion and $2.4 billion in the three and six months ended June 30, 2025, respectively, decreased 14% and 13% compared to $1.4 billion and $2.8 billion in the three and six months ended June 30, 2024, respectively.

Year-over-year in the second quarter, product revenues decreased 13% and service revenues decreased 15%.

Revenues declined in all segments with DRE, WCC and PRI impacting 46%, 24%, and 21% of the decrease, respectively, with the remaining decrease from lower activity in integrated services and projects.

Geographically, the year-over-year first quarter revenue decrease was led by a decline in the Latin America, Europe/Sub-Sahara Africa/Russia and North America regions, which impacted 78%, 15% and 10% of the decrease, respectively, partly offset by a revenue increase in Middle East/North Africa/Asia.

Year-over-year revenue decreases were primarily driven by a decline in activity across segments and geographies.

Operating income of $142 million in the three months ended March 31, 2025, decreased 39% compared to $233 million in the three months ended March 31, 2024, due to the decline in revenue, with a partial offset from lower cost of products and services and selling general, administrative and research and development costs.

Cost of products and services of $819 million in the three months ended March 31, 2025, decreased 7% compared to $884 million in the three months ended March 31, 2024.

Our cost of products and services as a percentage of revenues was 69% in the three months ended March 31, 2025 compared to 65% in the three months ended March 31, 2024.

Selling, general, administrative and research and development costs of $190 million in the three months ended March 31, 2025, decreased 20% compared to $236 million in the three months ended March 31, 2024.

The year-over-year decrease was primarily due to a decline in amortization expense and the cost of employee incentive programs.

Selling, general, administrative and research and development costs as a percentage of revenues was 16% in the three months ended March 31, 2025, and 17% in the three months ended March 31, 2024.

Restructuring charges were $29 million in the three months ended March 31, 2025 and $3 million in the three months ended March 31, 2024.

Year-over-year in the six months ended June 30, 2025, product revenues decreased 11% and services revenue decreased 15%.

Revenues declined in all segments with DRE, WCC and PRI impacting 45%, 18% and 15% of the decrease, respectively, with the remaining decrease from lower activity in integrated services and projects.

Geographically, the year-over-year second quarter revenue decrease was led by a decline in the Latin America, Middle East/North Africa/Asia, Europe/Sub-Sahara Africa/Russia and North America regions, which impacted 79%, 9%, 7% and 5% of the decrease, respectively.

Year-over-year in the six months ended June 30, 2025, the revenue decrease was led by a decline in the Latin America, Europe/Sub-Sahara Africa/Russia, North America and Middle East/North Africa/Asia regions, which impacted 78%, 11%, 8% and 3% of the decrease.

Year-over-year revenue decreases were primarily caused by a softening of the overall market which drove a decline in activity across segments and geographies.

Operating income of $237 million and $379 million in the three and six months ended June 30, 2025, respectively, decreased 10% and 24% compared to $264 million and $497 million in the three and six months ended June 30, 2024, respectively, due to the decline in revenue, with a partial offset from lower cost of products and services, lower selling general, administrative and research and development costs and a gain on the sale of our pressure pumping business in Argentina.

Cost of products and services of $829 million and $1.6 billion in the three and six months ended June 30, 2025, respectively, decreased 7% in each period compared to $891 million and $1.8 billion in the three and six months ended June 30, 2024, respectively.

Our cost of products and services as a percentage of revenues was 69% in both the three and six months ended June 30, 2025 compared to 63% and 64% in the three and six months ended June 30, 2024, respectively.

Selling, general, administrative and research and development costs of $194 million and $384 million in the three and six months ended June 30, 2025, respectively, decreased 21% and 20% compared to $247 million and $483 million in the three and six months ended June 30, 2024, respectively.

The year-over-year decrease was primarily due to a decline in amortization expense, a decline in the cost of employee incentive programs and a reduction in headcount leading to lower personnel costs.

Selling, general, administrative and research and development costs as a percentage of revenues was 16% in both the three and six months ended June 30, 2025, and 18% in both the three and six months ended June 30, 2024.

Gain on Sale of Business was $70 million in both the three and six months ended June 30, 2025 due to the sale of our pressure pumping business in Argentina during the second quarter of 2025.

Restructuring charges were $11 million and $40 million in the three and six months ended June 30, 2025, respectively, and $5 million and $8 million in the three and six months ended June 30, 2024, respectively.

See “Note 4 – Restructuring Charges” for additional information.

Other Charges, Net in the three months ended March 31, 2025 were $13 million in net charges, and primarily include fees to third-party financial institutions related to collections of certain receivables from our largest customer in Mexico.

Other Charges, Net in the three months ended March 31, 2024 were $2 million in net charges.

Other Charges (Credits), Net in the three and six months ended June 30, 2025 were $3 million and $16 million in net charges, respectively, and primarily include fees to third-party financial institutions related to collections of certain receivables from our largest customer in Mexico as well as other miscellaneous charges and credits.

Other Charges (Credits), Net in the three and six months ended June 30, 2024 were $2 million in net credits and nil in net charges, respectively.

Consolidated Statements of Operations - Non-Operating Summary

Interest Expense, Net

Interest Expense, Net was $26 million and $29 million in the three months ended March 31, 2025 and 2024, respectively.

Interest Expense, Net was $21 million and $47 million in the three and six months ended June 30, 2025 , respectively, and $24 million and $53 million in the three and six months ended June 30, 2024, respectively.

Interest Expense, Net is interest expense net of interest income.

Interest expense was $37 million in the three months ended March 31, 2025 and $43 million in the three months ended March 31, 2024.

Interest expense was $35 million and $72 million in the three and six months ended June 30, 2025, respectively, and $41 million $84 million in the three and six months ended June 30, 2024, respectively.

The decrease was primarily due to the reduction in our outstanding long-term debt.

Interest income was $11 million in the three months ended March 31, 2025 and $14 million in the three months ended March 31, 2024.

Interest income was $14 million and $25 million in the three and six months ended June 30, 2025, respectively, and $17 million and $31 million in the three and six months ended June 30, 2024, respectively.

Loss on Blue Chip Swap Securities

An indirect foreign exchange mechanism known as the Blue Chip Swap (“BCS”) allows entities to remit U.S.

dollars from operations in Argentina.

During the second quarter of 2025 and 2024, we entered into a series of BCS securities transactions that resulted in a “Loss on Blue Chip Swap Securities” of $1 million in the six months ended June 30, 2025 and $10 million in the six months ended June 30, 2024, respectively.

See “Note 13 – Blue Chip Swap Securities - Argentina” to our Condensed Consolidated Financial Statements for additional details.

Other Expense, Net

Other Expense, Net was $20 million in the three months ended March 31, 2025 and $22 million in the three months ended March 31, 2024.

Other Expense, Net was $24 million and $44 million in the three and six months ended June 30, 2025, respectively, and $20 million and $42 million in the three and six months ended June 30, 2024, respectively.

Other Expense, Net primarily represents foreign exchange losses in countries with no or limited markets to hedge, letter of credit fees and other financing charges, including bond redemption premiums partially offset by certain investment gains and losses.

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Financial information by segment is summarized below.

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Reportable Segments All

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Share-based Compensation

Gain on Sale of Business

Restructuring Charges

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(b) Segment selling, general and administrative and research and development costs .

Three Months Ended March 31, 2024

Six Months Ended June 30, 2025

Reportable Segments All

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Share-based Compensation

Gain on Sale of Business

Restructuring Charges

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(b) Segment selling, general and administrative and research and development costs .

Three Months Ended June 30, 2024

Reportable Segments All

(Dollars in millions) DRE

Revenue $ 427 $ 504 $ 369 105 $ 1,405

Direct Costs (a)

(241) (297) (236)

Other Expense (b)

(56) (62) (48)

DRE Segment Adjusted EBITDA 130 130

WCC Segment Adjusted EBITDA 145 145

PRI Segment Adjusted EBITDA 85 85

Corporate (18)

Depreciation and Amortization (86)

Share-based Compensation

Restructuring Charges

Other Charges, Net

Operating Income $ 264

(a) Segment cost of sales and direct operating costs.

(b) Segment selling, general and administrative and research and development costs .

Six Months Ended June 30, 2024

Reportable Segments All

(Dollars in millions) DRE

Revenue $ 849 $ 962 $ 717 $ 235 $ 2,763

Direct Costs (a)

(480) (573) (467)

Other Expense (b)

(109) (124) (92)

DRE Segment Adjusted EBITDA 260 260

WCC Segment Adjusted EBITDA 265 265

PRI Segment Adjusted EBITDA 158 158

Corporate (32)

Depreciation and Amortization (171)

Share-based Compensation

Restructuring Charges

Operating Income $ 497

(a) Segment cost of sales and direct operating costs.

(b) Segment selling, general and administrative and research and development costs .

Three Months Ended Variance

($ in Millions) March 31, 2025 March 31, 2024 $

($ in Millions) June 30, 2025 June 30, 2024 $

Revenue $ 335 $ 427 $ (92) (22) %

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Segment Adj EBITDA Margin 20.6 % 30.4 % n/m (985) bps

DRE revenues of $350 million in the three months ended March 31, 2025, decreased $72 million or 17%, compared to $422 million in the three months ended March 31, 2024.

Of the first quarter year-over-year revenue decrease, approximately 85% of the decrease was from lower activity in drilling-related services.

Six Months Ended Variance

($ in Millions) June 30, 2025 June 30, 2024 $

Revenue $ 685 $ 849 $ (164) (19) %

(446) (480) 34 7 %

Other Expense

(96) (109) 13 12 %

Segment Adjusted EBITDA $ 143 $ 260 $ (117) (45) %

Segment Adj EBITDA Margin 20.9 % 30.6 % n/m (975) bps

DRE revenues of $335 million and $685 million in the three and six months ended June 30, 2025, decreased $92 million or 22%, and decreased $164 million or 19% compared to $427 million and $849 million in the three and six months ended June 30, 2024, respectively.

Of the second quarter year-over-year revenue decrease, approximately 45% of the decrease was from lower activity in managed pressure drilling and approximately 30% of the decrease was attributable to a decline in activity for drilling-related services.

The remaining decrease of approximately 25% was attributable to a decline in wireline activity.

Geographically, approximately 80% of the revenue decrease was from the Latin America region.

DRE segment adjusted EBITDA of $74 million in the three months ended March 31, 2025, decreased $56 million or 43%, compared to $130 million in the three months ended March 31, 2024.

DRE segment adjusted EBITDA margin was 21.1% in the three months ended March 31, 2025 compared to 30.8% in the three months ended March 31, 2024.

The first quarter segment adjusted EBITDA decreased primarily due to a decline in drilling-related services activity.

Of the year-to-date year-over-year revenue decrease, approximately 55% of the decrease was from lower activity in drilling-related service and approximately 25% decrease was attributable to a decline in activity for managed pressure drilling.

The remaining decrease of approximately 20% was attributable to a decline in wireline activity.

Geographically, approximately 85% of the revenue decrease was from the Latin America region.

DRE segment adjusted EBITDA of $69 million and $143 million in the three and six months ended June 30, 2025, decreased $61 million or 47%, and decreased $117 million or 45%, compared to $130 million and $260 million in the three and six months ended June 30, 2024, respectively.

DRE segment adjusted EBITDA margin was 20.6% and 20.9% in the three and six months ended June 30, 2025 compared to 30.4% and 30.6% in the three and six months ended June 30, 2024, respectively.

The second quarter and year-to-date segment adjusted EBITDA decreased year-over-year primarily due to a decline of activity in Latin America.

Both direct costs and other expense generally decreased in line with the decrease in activity.

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Three Months Ended Variance

($ in Millions) March 31, 2025 March 31, 2024 $

($ in Millions) June 30, 2025 June 30, 2024 $

Revenue $ 456 $ 504 $ (48) (10) %

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Segment Adj EBITDA Margin 25.9 % 28.8 % n/m (289) bps

WCC revenues of $441 million in the three months ended March 31, 2025, decreased $17 million or 4%, compared to $458 million in the three months ended March 31, 2024.

The first quarter year-over-year revenue decrease was primarily due to a decline in activity for cementation products which impacted 65% of the decrease for product lines which decreased year-over-year.

This was partly offset by revenue increases from well services and completions activity.

Geographically, of the regions with revenue decreases, approximately 50% of the decrease was from North America and approximately 30% was from the Latin America region.

Six Months Ended Variance

($ in Millions) June 30, 2025 June 30, 2024 $

Revenue $ 897 $ 962 $ (65) (7) %

Direct Costs (537) (573) 36 6 %

Other Expense (114) (124) 10 8 %

Segment Adjusted EBITDA $ 246 $ 265 $ (19) (7) %

Segment Adj EBITDA Margin 27.4 % 27.5 % n/m (12) bps

WCC revenues of $456 million and $897 million in the three and six months ended June 30, 2025, decreased $48 million or 10%, and decreased $65 million or 7%, compared to $504 million and $962 million in the three and six months ended June 30, 2024, respectively.

The second quarter year-over-year revenue decrease was primarily due to a decline in activity for completions which impacted approximately 80% of the decrease.

This was partly offset by revenue increases from liner hangers and well services activity.

Geographically, of the regions with revenue decreases, approximately 60% of the decrease was from Latin America and approximately 30% was from the Europe/Sub-Sahara Africa/Russia region.

This was partly offset by a revenue increase in the Middle East/North Africa/Asia region.

WCC segment adjusted EBITDA of $128 million in the three months ended March 31, 2025, increased $8 million or 7%, compared to $120 million in the three months ended March 31, 2024.

WCC segment adjusted EBITDA margin was 29.0% in the three months ended March 31, 2025, compared to 26.2% in the three months ended March 31, 2024.

The increase in segment adjusted EBITDA was primarily due to higher margin activity in the Middle East/North Africa/Asia region and lower selling, general and administrative costs.

Both direct costs and other expense generally decreased in line with the decrease in activity.

However, the rate of decrease in direct costs and other expense was higher than the rate of decrease in revenue, contributing to increase in margin.

The year-to-date year-over-year revenue decrease was primarily due to a decline in activity for completions and cementation products with each one impacting approximately 40% of the decrease for product lines which decreased year-over-year.

This was partly offset by revenue increases from well services and liner hangers activity.

Geographically, of the regions with revenue decreases, approximately 45% of the decrease was from Latin America and the remaining decrease from near equal declines in the North America and Europe/Sub-Sahara Africa/Russia regions.

This was partly offset by a revenue increase in the Middle East/North Africa/Asia region.

WCC segment adjusted EBITDA of $118 million and $246 million in the three and six months ended June 30, 2025, decreased $27 million or 19% , and decreased $19 million or 7%, compared to $145 million and $265 million in the three and six months ended June 30, 2024, respectively.

WCC segment adjusted EBITDA margin was 25.9% and 27.4% in the three and six months ended June 30, 2025, compared to 28.8% and 27.5% in the three and six months ended June 30, 2024, respectively.

The second quarter and year-to-date segment adjusted EBITDA decreased year-over-year primarily due to a decline in overall activity partly offset by higher margin activity in the Middle East/North Africa/Asia region.

In the second quarter, both direct costs and other expense decreased along with the decrease in activity.

However, the rate of decrease in direct costs and other expense was lower than the rate of decrease in revenue, contributing to the decrease in margin.

Year-to-date, both direct costs and other expense decreased along with the decrease in activity.

However, the decrease in margin was driven by the rate of decrease for direct costs being lower than the rate of decrease in revenue, partly offset by the rate of decrease for other expense being higher than the rate of decrease in revenue.

Three Months Ended Variance

($ in Millions) March 31, 2025 March 31, 2024 $

($ in Millions) June 30, 2025 June 30, 2024 $

Revenue $ 327 $ 369 $ (42) (11) %

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Segment Adj EBITDA Margin 19.3 % 23.0 % n/m (377) bps

PRI revenues of $334 million in the three months ended March 31, 2025, decreased $14 million or 4% compared to $348 million in the three months ended March 31, 2024.

The first quarter year-over-year revenue decrease was primarily due to decline in activity for intervention services and drilling tools and artificial lift which impacted 60% and 30% of the decrease, respectively, for product lines which decreased year-over-year.

This was partly offset by revenue increase from pressure pumping activity.

Six Months Ended Variance

($ in Millions) June 30, 2025 June 30, 2024 $

Revenue $ 661 $ 717 $ (56) (8) %

Direct Costs (450) (467) 17 4 %

Other Expense (86) (92) 6 7 %

Segment Adjusted EBITDA $ 125 $ 158 $ (33) (21) %

Segment Adj EBITDA Margin 18.9 % 22.0 % n/m (313) bps

PRI revenues of $327 million and $661 million in the three and six months ended June 30, 2025, decreased $42 million or 11% and decreased $56 million or 8% compared to $369 million and $717 million in the three and six months ended June 30, 2024, respectively.

The second quarter year-over-year revenue decrease was primarily due to a decline in activity for intervention services and drilling tools and pressure pumping which impacted approximately 50% and 45% of the decrease, respectively, for product lines which decreased year-over-year.

The sale of our pressure pumping business in Argentina was the primary contributor to the decline in pressure pumping activity.

The decrease in revenue was partly offset by revenue increase from sub sea intervention activity.

Geographically, approximately 70% of the revenue decrease was from the Latin America region.

PRI segment adjusted EBITDA of $62 million in the three months ended March 31, 2025, decreased $11 million or 15% compared to $73 million in the three months ended March 31, 2024.

PRI segment adjusted EBITDA margin was 18.6% in the three months ended March 31, 2025, compared to 21.0% in the three months ended March 31, 2024.

The first quarter year-over-year decrease in segment adjusted EBITDA was primarily due to a decline in activity and cost inflation on products sold.

Direct costs slightly decreased year-over-year, while other expense decreased in line with decrease in activity.

However, the decrease in direct costs and other expense was lower than decrease in revenue, contributing to the decrease in margin.

The year-to-date year-over-year revenue decrease was primarily due to a decline in activity for intervention services and drilling tools which impacted approximately 60% of the decrease with remaining decrease primarily from lower pressure pumping activity which impacted approximately 30% of the decrease.

This was partly offset by revenue increase from sub sea intervention activity.

Geographically, approximately 75% of the revenue decrease was from the Latin America region.

PRI segment adjusted EBITDA of $63 million and $125 million in the three and six months ended June 30, 2025, decreased $22 million or 26% and decreased $33 million or 21% compared to $85 million and $158 million in the three and six months ended June 30, 2024, respectively.

PRI segment adjusted EBITDA margin was 19.3% and 18.9% in the three and six months ended June 30, 2025, compared to 23.0% and 22.0% in the three and six months ended June 30, 2024.

The second quarter and year-to-date segment adjusted EBITDA decreased year-over-year primarily due to a decline in overall activity.

Both direct costs and other expense generally decreased in line with the decrease in activity.

However, the rate of decrease in direct costs and other expense was lower than the rate of decrease in revenue, contributing to the decrease in margin.

All Other Results

All Other results were from non-core business activities that do not individually meet the criteria for segment reporting, including integrated services and projects, which includes pass through and project management services.

All Other revenues were $68 million in the three months ended March 31, 2025, compared to $130 million in the three months ended March 31, 2024.

The first quarter year-over-year decrease was due to a decline in international activity for integrated services and projects.

Corporate was a net expense of $15 million in the three months ended March 31, 2025 compared to $14 million in the three months ended March 31, 2024.

All Other revenues were $86 million and $154 million in the three and six months ended June 30, 2025, compared to $105 million and $235 million in the three and six months ended June 30, 2024.

The year-over-year decrease was due to a decline in international activity for integrated services and projects.

Corporate was a net expense of $15 million and $30 million in the three and six months ended June 30, 2025 compared to $18 million and $32 million in the three and six months ended June 30, 2024.

The year-over-year decreases in expense were primarily due to reduced costs in certain professional fees.

Depreciation and Amortization

Depreciation and amortization expense was $62 million in the three months ended March 31, 2025 compared to $85 million in the three months ended March 31, 2024.

The year-over-year decrease was primarily due to certain intangible assets reaching full amortization in the fourth quarter of 2024.

Depreciation and amortization expense was $64 million and $126 million in the three and six months ended June 30, 2025 compared to $86 million and $171 million in the three and six months ended June 30, 2024.

The year-over-year decreases were primarily due to certain intangible assets reaching full amortization in the fourth quarter of 2024.

Share-based Compensation

We recognized $7 million of share-based compensation in the three months ended March 31, 2025 compared to $13 million in the three months ended March 31, 2024.

The year-over-year decrease in share-based compensation expense was primarily due to the vesting of equity awards, resulting in a lower number of non-vested awards.

We recognized $9 million and $16 million of share-based compensation in the three and six months ended June 30, 2025 compared to $12 million and $25 million in the three and six months ended June 30, 2024.

The year-over-year decreases were primarily due to the vesting of previously granted equity awards, resulting in a lower number of unvested awards subject to expense recognition.

Growth and spending in the energy services industry is highly dependent on many external factors.

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our customers’ capital expenditures;

environmental, social and governance and other sustainability policies and initiatives;

environmental, social and other sustainability policies and initiatives;

world economic, political, trade, and weather conditions;

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and, non-OPEC+ investments and project timing.

Imbalance across geographies driven by geopolitical conflicts, investment variances and supply disruptions are driving a greater focus on energy security and resiliency, which in turn is creating a shift towards national oil companies and diversification across multiple energy sources (oil, gas, coal, renewables, etc.) to meet domestic and global demand.

The overall international market has softened over the past nine months, and the industry has witnessed substantial drops in Mexico along with continued reduction in certain portions of our North America business.

We expect a continued focus on capital discipline and efficiencies, particularly in our Latin American and North American regions, which we expect to negatively impact demand for our services and products in 2025, as our customers regulate activity timing and services spending, relative to macro-driven factors.

Particularly, in the near term we expect lower demand from our largest customer in Mexico.

Imbalances across geographies driven by geopolitical conflicts, investment variances and supply disruptions are driving a greater focus on energy security and resiliency, which in turn is creating a shift towards national oil companies and diversification across multiple energy sources (oil, gas, coal, renewables, etc.) to meet domestic and global demand.

The market has softened over the past six months due to uncertainty around the impact of tariffs and trade policies, continued geopolitical instability and additional supply volumes coming to the market from both OPEC+ accelerating the rollback of its voluntary oil production cuts and non-OPEC+ projects coming online.

The industry has witnessed substantial oilfield services spend and activity reductions in Mexico and North America, slower growth in parts of the Middle East, and project delays in various regions.

In the near term, we anticipate an ongoing emphasis on capital discipline and operational efficiencies worldwide, coupled with reduced demand from our primary customer in Mexico and moderated growth in the Middle East.

Collectively, these factors are expected to exert continued downward pressure on demand for our services and products throughout the remainder of 2025 as customers adjust their activity timelines and oilfield services expenditures in response to prevailing macroeconomic trends.

Additionally, trade concerns such as recent U.S.

tariff actions and potential retaliatory responses has increased uncertainty in our industry and in relation to global economic outlook, which may contribute to an economic slowdown and negatively impact both domestic and international crude demand and increase cost pressure on the sector.

tariff actions and potential retaliatory responses have increased uncertainty in our industry and in relation to global economic outlook, which may contribute to an economic slowdown and negatively impact both domestic and international crude demand and increase cost pressure on the sector.

Over the mid to long-term, we expect demand for oil and natural gas exploration and production as well as new energy platforms to continue to require more advanced technology from the energy service industry.

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Liquidity and Capital Resources

At March 31, 2025, we had cash and cash equivalents of $873 million and $57 million in restricted cash, compared to $916 million of cash and cash equivalents and $59 million in restricted cash at December 31, 2024.

At June 30, 2025, we had cash and cash equivalents of $943 million and $60 million in restricted cash, compared to $916 million of cash and cash equivalents and $59 million in restricted cash at December 31, 2024.

The following table summarizes cash flows provided by (used in) each type of business activity in the periods presented:

Three Months Ended March 31,

Six Months Ended June 30,

(Dollars in millions) 2025

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Operating Activities

Cash provided by operating activities was $142 million for the three months ended March 31, 2025 compared to cash provided by operating activities of $131 million for the three months ended March 31, 2024.

The increase in cash provided by operating activities in 2025 over 2024 was primarily due to lower employee costs, partially offset by decreased collections as a result of decreased revenue.

During both the three months ended March 31, 2025 and March 31, 2024, we entered into arrangements with third-party financial institutions related to collections of certain receivables from our largest customer in Mexico.

Pursuant to such arrangements, we received $93 million and $142 million during the three months ended March 31, 2025 and March 31, 2024, respectively.

Factoring arrangements related to certain receivables during both the three months ended March 31, 2025 and March 31, 2024 resulted in cash proceeds at the time of factoring of $55 million and $8 million, respectively.

Cash provided by operating activities was $270 million for the six months ended June 30, 2025 compared to cash provided by operating activities of $281 million for the six months ended June 30, 2024.

The decrease in cash provided by operating activities in 2025 over 2024 was primarily due to a decrease in collections as a result of decreased revenue, partially offset by lower employee costs.

During both the six months ended June 30, 2025 and June 30, 2024, we had arrangements with third-party financial institutions related to collections of certain receivables from our largest customer in Mexico.

Pursuant to such arrangements, we received $93 million and $142 million during the six months ended June 30, 2025 and June 30, 2024, respectively.

Factoring arrangements related to certain receivables during both the six months ended June 30, 2025 and June 30, 2024 resulted in cash proceeds at the time of factoring of $141 million and $50 million, respectively.

Investing Activities

Cash used in investing activities was $79 million for the three months ended March 31, 2025.

The primary investing use of cash was for capital expenditures of $77 million.

Cash used in investing activities was $54 million for the three months ended March 31, 2024.

The primary investing activities were from cash used for capital expenditures of $59 million and cash used for acquisitions net of cash acquired, of $36 million.

The uses of cash were primarily offset by proceeds from sale of investments of $41 million from our marketable securities in Argentina and other outflows of $10 million.

Cash used in investing activities was $36 million for the six months ended June 30, 2025.

The primary investing use of cash was for capital expenditures of $131 million, partially offset by $97 million of proceeds received from the sale of our pressure pumping business in Argentina (see “Note 2 – Segment Information”).

Cash used in investing activities also includes the use of the Blue Chip Swap mechanism in Argentina, of which the purchases of $83 million offset the proceeds of $82 million, resulting in a loss of $1 million during the six months ended June 30, 2025 (see “Note 13 – Blue Chip Swap Securities - Argentina”).

Cash used in investing activities was $115 million for the six months ended June 30, 2024.

The primary investing activities were cash used for capital expenditures of $121 million and cash used for acquisitions net of cash acquired, of $36 million.

Cash used in investing activities also includes the use of the Blue Chip Swap mechanism in Argentina, of which the purchases of $50 million offset the proceeds of $40 million, resulting in a loss of $10 million during the six months ended June 30, 2024.

The uses of cash were primarily offset by proceeds from sale of investments of $41 million from our marketable securities in Argentina.

Financing Activities

Cash used in financing activities was $133 million for the three months ended March 31, 2025.

The primary financing uses of cash were for share repurchases of $53 million (see “Note 9 – Shareholders’ Equity”), repayments and repurchases of long-term debt of $39 million (including $34 million in repurchases of our 2030 Senior Notes, see “Note 7 – Borrowings and Other Debt Obligations”), tax remittances on equity awards vested of $20 million and cash dividends of $18 million.

Cash used in financing activities was $187 million for the three months ended March 31, 2024.

Cash used in financing activities was $230 million for the six months ended June 30, 2025.

The primary financing uses of cash were for share repurchases of $87 million (see “Note 9 – Shareholders’ Equity”), repayments and repurchases of long-term debt of $73 million (including $61 million in repurchases of our 2030 Senior Notes, see “Note 7 – Borrowings and Other Debt Obligations”), cash dividends of $36 million and tax remittances on equity awards vested of $20 million.

Cash used in financing activities was $289 million for the six months ended June 30, 2024.

The primary financing uses of cash were for repayments and repurchases of long-term debt of $259 million.

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In addition, we have derivative financial instruments where we have notional amounts that do not generally represent cash amounts exchanged by the parties and are calculated based on the terms of the derivative instrument, however, in the event of a related default, we could potentially be required to pay.

See further discussion in our Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”) and “Note 12 – Credit Default Swap”.

Our cash requirements also include payments for our shareholder returns programs described in “Note 9 – Shareholders’ Equity.”

As of March 31, 2025, the aggregate principal amount of our primary debt outstanding was $1.56 billion of our 2030 Senior Notes.

We expect to pay $135 million in interest payments in 2025 specific to these notes.

See further discussion in our Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”) and “Note 12 – Credit Default Swap.” Our cash requirements also include payments for our shareholder returns programs described in “Note 9 – Shareholders’ Equity.”

As of June 30, 2025, the aggregate principal amount of our primary debt outstanding was $1.54 billion of our 2030 Senior Notes.

We expect to pay $134 million in interest payments in 2025 specific to this note, of which we have paid $68 million during the six months ended June 30, 2025.

See “Note 7 – Borrowings and Other Debt Obligations” for additional information.

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Cash and cash equivalents and restricted cash are held by subsidiaries outside of Ireland.

At March 31, 2025 and December 31, 2024, we had approximately $140 million and $127 million, respectively, of our cash and cash equivalents that cannot be immediately repatriated from various countries due to country central bank controls or other regulations.

At June 30, 2025 and December 31, 2024, we had approximately $66 million and $127 million, respectively, of our cash and cash equivalents that cannot be immediately repatriated from various countries due to country central bank controls or other regulations.

As we continue to conduct business in certain countries with cash that cannot be immediately repatriated, we may consider infrequent transactions to safeguard our cash from exposure to the effects of inflation and currency devaluation.

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In addition, our customers are primarily in fossil fuel-related industries and broad declines in demand for or pricing of oil or natural gas might impact the collections of our customer receivables.

Our net accounts receivables in Mexico were 28% and 31% of our total net accounts receivables, as of March 31, 2025 and December 31, 2024, respectively, of which our largest customer in the country accounted for 25% and 26% of our total net outstanding accounts receivables, respectively.

Mexico continues to account for a large percentage of our receivables despite dropping below 10% of total revenues for the three months ended March 31, 2025.

Our net accounts receivables in Mexico were 33% and 31% of our total net accounts receivables, as of June 30, 2025 and December 31, 2024, respectively, of which our largest customer in the country accounted for 30% and 26% of our total net outstanding accounts receivables, respectively.

Mexico continues to account for a large percentage of our receivables despite dropping below 10% of total revenues for the three months ended June 30, 2025.

Our largest customer in Mexico has a history of making late payments and, in more recent periods, has utilized third-party financial institutions to pay certain of our receivables.

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and delays or failures to pay or defaults, if any, could negatively impact the future results of the Company.

During the three months ended March 31, 2025 we paid an immaterial amount of fees to third-party financial institutions related to collections of certain receivables from our largest customer in Mexico.

Pursuant to such arrangements, we received $93 million during the three months ended March 31, 2025.

During the six months ended June 30, 2025 we paid an immaterial amount of fees to third-party financial institutions related to collections of certain receivables from our largest customer in Mexico.

Pursuant to such arrangements, we received $93 million during the six months ended June 30, 2025.

Except for the above, no other country accounted for more than 10% of our net accounts receivables balance.

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From time to time, we participate in factoring arrangements to sell accounts receivable to third-party financial institutions for cash proceeds net of discounts and hold-back.

During the three months ended March 31, 2025 and March 31, 2024, we sold accounts receivable balances of $55 million and $8 million, and received cash proceeds of $55 million and $8 million, respectively, at the time of factoring.

During the three and six months ended June 30, 2025, we sold accounts receivable balances of $88 million and $143 million, and received cash proceeds of $86 million and $141 million, respectively, at the time of factoring.

During the three and six months ended June 30, 2024, we sold accounts receivable balances of $43 million and $51 million, and received cash proceeds of $42 million and $50 million, respectively, at the time of factoring.

The above factoring proceeds were included in Net Cash Provided by Operating Activities in the Condensed Consolidated Statements of Cash Flows.

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The Credit Agreement is guaranteed by the Company and certain of our subsidiaries and secured by substantially all of the personal property of the Company and those subsidiaries.

At March 31, 2025 and December 31, 2024, the Credit Agreement allowed for a total commitment amount of $720 million, maturing on October 24, 2028.

At June 30, 2025 and December 31, 2024, the Credit Agreement allowed for a total commitment amount of $720 million, maturing on October 24, 2028.

Financial covenants in the Credit Agreement include a $250 million minimum liquidity covenant (which may increase up to $400 million dependent on the nature of transactions we may decide to enter into), a minimum interest coverage ratio of 2.50 to 1.00, a maximum total net leverage ratio of 3.50 to 1.00, and a maximum secured net leverage ratio of 1.50 to 1.00.

As of March 31, 2025, we had zero borrowings outstanding under the Credit Agreement and $397 million of letters of credit outstanding.

As of June 30, 2025, we had zero borrowings outstanding under the Credit Agreement and $412 million of letters of credit outstanding.

The letters of credit consisted of $253 million for performance letters of credit, $6 million for financial letters of credit under the Credit Agreement and $153 million letters of credit under various uncommitted bi-lateral facilities ($48 million of which was cash collateral held and recorded in “Restricted Cash” on the Condensed Consolidated Balance Sheets).

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We utilize surety bonds as part of our customary business practice in certain regions, primarily Latin America.

As of March 31, 2025 and December 31, 2024, we had surety bonds outstanding of $501 million and $520 million, respectively.

As of June 30, 2025 and December 31, 2024, we had surety bonds outstanding of $499 million and $520 million, respectively.

Any of our outstanding letters of credit or surety bonds could be called by the beneficiaries should we breach certain contractual or performance obligations and could reduce our available liquidity if we are unable to mitigate the issue.

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These statements constitute forward-looking statements.

These forward-looking statements generally are

identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “budget,” “strategy,” “plan,” “guidance,” “outlook,” “may,” “should,” “could,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions, although not all forward-looking statements contain these identifying words.

These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “budget,” “strategy,” “plan,” “guidance,” “outlook,” “may,” “should,” “could,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions, although not all forward-looking statements contain these identifying words.

Forward-looking statements reflect our beliefs and expectations based on current estimates and projections.

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• changes in, and the administration of, treaties, laws, and regulations, including in response to issues related to the Russia Ukraine Conflict such as nationalization of assets, and the potential for such issues to exacerbate other risks and uncertainties listed or referenced;

• increases in the prices and lead times, and the lack of availability of our procured products and services, including due to macroeconomic and geopolitical conditions such as tariffs and changes in trade policies;

• our ability to timely collect from customers;

• cybersecurity incidents, as our reliance on digital technologies increases, those digital technologies may become more vulnerable and/or experience a higher rate of cybersecurity attacks, intrusions or incidents in the current environment of remote connectivity, as well as increased geopolitical conflicts and tensions, including as a result of the Russia Ukraine Conflict;

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• our ability to effectively and timely address the need to conduct our operations and provide services to our customers more sustainably and with a lower carbon footprint;

• risks associated with disease outbreaks and other public health issues, including a pandemic, their impact on the global economy and our business, customers, suppliers and other partners;

further spread and potential for a resurgence of a pandemic in a given geographic region and related disruptions to our business, employees, customers, suppliers and other partners and additional regulatory measures or voluntary actions that may be put in place to limit the spread of a pandemic, including vaccination requirements and the associated availability of vaccines, restrictions on business operations or social distancing requirements, and the duration and efficacy of such restrictions;

• the price and price volatility of, and demand for, oil, natural gas and natural gas liquids;

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• our ability to effectively and timely adapt our technology portfolio, products and services to remain competitive and to address and participate in changes to the market demands, including for the transition to alternate sources of energy such as geothermal, carbon capture and responsible abandonment, including our digitalization efforts;

• increases in the prices and lead times;

and the lack of availability of our procured products and services;

• our ability to timely collect from customers;

• our ability to realize cost savings and business enhancements from our revenue and cost improvement efforts;

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• adverse weather conditions in certain regions of our operations;

• risks associated with disease outbreaks and other public health issues, including a pandemic, their impact on the global economy and our business, customers, suppliers and other partners;

Many of these factors are macroeconomic in nature and are, therefore, beyond our control.

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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