Weatherford International plc 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. As used in this item, “Weatherford”, “the Company,” “we,” “us” and “our” refer to Weatherford International plc, a public limited company organized under the laws of Ireland, and its subsidiaries on a consolidated basis. The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements and Notes thereto included in “Item 1. Financial Statements.” Our discussion includes various forward-looking statements about our markets, the demand for our products and services and our future results. These statements include assumptions, certain risks and uncertainties. For information about these assumptions, risks and uncertainties, refer to the section “Forward-Looking Statements” and the section “PART II - OTHER INFORMATION - Item 1A. Risk Factors.” Business Weatherford is a leading global energy services company providing equipment and services used in the drilling, evaluation, well construction, completion, production, intervention and responsible abandonment of wells in the oil and natural gas exploration and production industry as well as new energy platforms. We conduct business in approximately 75 countries, answering the challenges of the energy industry with 310 operating locations including manufacturing, research and development, service, and training facilities. Our operational performance is reviewed and managed across the life cycle of the wellbore, and we report in three segments (1) Drilling and Evaluation, (2) Well Construction and Completions, and (3) Production and Intervention. Drilling and Evaluation (“DRE”) offers a suite of services including managed pressure drilling, drilling services, wireline and drilling fluids. DRE offerings range from early well planning to reservoir management through innovative tools and expert engineering to optimize reservoir access and productivity. Well Construction and Completions (“WCC”) offers products and services for well integrity assurance across the full life cycle of the well. The primary offerings are tubular running services, cementation products, completions, liner hangers and well services. WCC deploys conventional to advanced technologies, providing safe and efficient services in any environment during the well construction phase. Production and Intervention (“PRI”) offers a suite of reservoir stimulation designs, and engineering capabilities that isolate zones and unlock reserves in conventional and unconventional wells, deep water, and aging reservoirs. The primary offerings are intervention services & drilling tools, artificial lift, digital solutions, sub-sea intervention and pressure pumping services in select markets. 20 Table of Contents Industry Trends Demand for our industry’s products and services is driven by many factors, including commodity prices, the number of oil and gas rigs and wells drilled, depth and drilling conditions of wells, number of well completions, age of existing wells, reservoir depletion, regulatory environment, and the level of workover activity worldwide. Lower oil and natural gas prices and lower rig count generally correlate to lower exploration and production spending, and higher oil and natural gas prices and higher rig count generally correlate to higher exploration and production spending. 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 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 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. 21 Table of Contents 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 Six Months Ended June 30, June 30, 2025 2024 2025 2024 Oil price - WTI (1) $ 64.63 $ 81.71 $ 68.23 $ 79.64 Oil price - Brent (1) $ 68.01 $ 84.65 $ 71.91 $ 83.83 Natural gas price - Henry Hub (2) $ 3.19 $ 2.08 $ 3.67 $ 2.11 (1) Oil price measured in dollars per barrel (rounded to the nearest $0.01) (2) Natural gas price measured in dollars per million British thermal units (rounded to the nearest $0.01) The table below shows historical average rig counts based on the weekly Baker Hughes Company rig count information. Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 North America 699 738 751 785 International 897 963 900 964 Worldwide 1,596 1,701 1,651 1,749 Russia Ukraine Conflict 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 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. We continue to closely monitor and evaluate the developments in Russia as well as any changes in international laws and sanctions. We believe that operational complexity will increase over time and therefore continually evaluate these potential impacts on our business. As such, we continue to actively evaluate various options, strategies and contingencies with respect to our business in Russia, including, but not limited to: • continuing the business in compliance with applicable laws and sanctions; • evaluating the continued use or change in products, equipment and service offerings we currently provide in Russia; • curtailing or winding down our activities over time; • potentially divesting some or all of our assets or businesses in Russia, which could include the option of re-entering the country if and when sanctions or applicable laws would allow for the same; and • potential nationalization of the business. 22 Table of Contents Consolidated Statements of Operations - Operating Summary 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. 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 (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 $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 $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 $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. 23 Table of Contents 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 $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. When economically advantageous, we enter into foreign currency forward contracts to mitigate the risk of future cash flows denominated in a foreign currency. Income Taxes We provide for income taxes based on the laws and rates in effect in the countries in which operations are conducted, or in which we or our subsidiaries are considered residents for income tax purposes. The relationship between our pre-tax income or loss from continuing operations and our income tax benefit or provision varies from period to period as a result of various factors, which include changes in total pre-tax income or loss, the jurisdictions in which our income is earned, the tax laws in those jurisdictions, the impacts of tax planning activities and the resolution of tax audits. Our effective rate differs from the Irish statutory tax rate as the majority of our operations are taxed in jurisdictions with different tax rates. In addition, certain charges do not result in significant tax benefit as a result of being attributed to a non-income tax jurisdiction or our inability to forecast realization of the tax benefit of such losses. Charges can be partially offset by the utilization of previously unbenefited deferred tax assets, such as net operating loss carryforwards. Please see “Note 11 – Income Taxes” to our Condensed Consolidated Financial Statements for additional details. 24 Table of Contents Results of Operations by Segment Financial information by segment is summarized below. Three Months Ended June 30, 2025 Reportable Segments All (Dollars in millions) DRE WCC PRI Other Total Revenue $ 335 $ 456 $ 327 $ 86 $ 1,204 Direct Costs (a) (220) (279) (220) Other Expense (b) (46) (59) (44) DRE Segment Adjusted EBITDA 69 69 WCC Segment Adjusted EBITDA 118 118 PRI Segment Adjusted EBITDA 63 63 All Other 19 Corporate (15) Depreciation and Amortization (64) Share-based Compensation (9) Gain on Sale of Business 70 Restructuring Charges (11) Other Charges, Net (3) Operating Income $ 237 (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, 2025 Reportable Segments All (Dollars in millions) DRE WCC PRI Other Total Revenue $ 685 $ 897 $ 661 $ 154 $ 2,397 Direct Costs (a) (446) (537) (450) Other Expense (b) (96) (114) (86) DRE Segment Adjusted EBITDA 143 143 WCC Segment Adjusted EBITDA 246 246 PRI Segment Adjusted EBITDA 125 125 All Other 23 Corporate (30) Depreciation and Amortization (126) Share-based Compensation (16) Gain on Sale of Business 70 Restructuring Charges (40) Other Charges, Net (16) Operating Income $ 379 (a) Segment cost of sales and direct operating costs. (b) Segment selling, general and administrative and research and development costs . 25 Table of Contents Three Months Ended June 30, 2024 Reportable Segments All (Dollars in millions) DRE WCC PRI Other Total 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 All Other 23 Corporate (18) Depreciation and Amortization (86) Share-based Compensation (12) Restructuring Charges (5) Other Charges, Net 2 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 WCC PRI Other Total 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 All Other 50 Corporate (32) Depreciation and Amortization (171) Share-based Compensation (25) Restructuring Charges (8) Operating Income $ 497 (a) Segment cost of sales and direct operating costs. (b) Segment selling, general and administrative and research and development costs . 26 Table of Contents DRE Results Three Months Ended Variance ($ in Millions) June 30, 2025 June 30, 2024 $ % or bps Revenue $ 335 $ 427 $ (92) (22) % Direct Costs (220) (241) 21 9 % Other Expense (46) (56) 10 18 % Segment Adjusted EBITDA $ 69 $ 130 $ (61) (47) % Segment Adj EBITDA Margin 20.6 % 30.4 % n/m (985) bps Six Months Ended Variance ($ in Millions) June 30, 2025 June 30, 2024 $ % or bps Revenue $ 685 $ 849 $ (164) (19) % Direct Costs (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. 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 $260 million in the three and six months ended June 30, 2024, respectively. DRE segment adjusted EBITDA margin was 20.6% and 20.9% in the three and six months ended June 30, 2025 compared to 30.4% and 30.6% in the three and six months ended June 30, 2024, respectively. The second quarter and year-to-date segment adjusted EBITDA decreased year-over-year primarily due to a decline of activity in Latin America. Both direct costs and other expense generally decreased in line with the decrease in activity. However, the rate of decrease in direct costs and other expense was lower than the rate of decrease in revenue, contributing to the decrease in margin. 27 Table of Contents WCC Results Three Months Ended Variance ($ in Millions) June 30, 2025 June 30, 2024 $ % or bps Revenue $ 456 $ 504 $ (48) (10) % Direct Costs (279) (297) 18 6 % Other Expense (59) (62) 3 5 % Segment Adjusted EBITDA $ 118 $ 145 $ (27) (19) % Segment Adj EBITDA Margin 25.9 % 28.8 % n/m (289) bps Six Months Ended Variance ($ in Millions) June 30, 2025 June 30, 2024 $ % or bps 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. 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 $265 million in the three and six months ended June 30, 2024, respectively. WCC segment adjusted EBITDA margin was 25.9% and 27.4% in the three and six months ended June 30, 2025, compared to 28.8% and 27.5% in the three and six months ended June 30, 2024, respectively. The second quarter and year-to-date segment adjusted EBITDA decreased year-over-year primarily due to a decline in overall activity partly offset by higher margin activity in the Middle East/North Africa/Asia region. In the second quarter, both direct costs and other expense decreased along with the decrease in activity. However, the rate of decrease in direct costs and other expense was lower than the rate of decrease in revenue, contributing to the decrease in margin. Year-to-date, both direct costs and other expense decreased along with the decrease in activity. However, the decrease in margin was driven by the rate of decrease for direct costs being lower than the rate of decrease in revenue, partly offset by the rate of decrease for other expense being higher than the rate of decrease in revenue. 28 Table of Contents PRI Results Three Months Ended Variance ($ in Millions) June 30, 2025 June 30, 2024 $ % or bps Revenue $ 327 $ 369 $ (42) (11) % Direct Costs (220) (236) 16 7 % Other Expense (44) (48) 4 8 % Segment Adjusted EBITDA $ 63 $ 85 $ (22) (26) % Segment Adj EBITDA Margin 19.3 % 23.0 % n/m (377) bps Six Months Ended Variance ($ in Millions) June 30, 2025 June 30, 2024 $ % or bps 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. 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 $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. 29 Table of Contents Corporate 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 $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 $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. Outlook Growth and spending in the energy services industry is highly dependent on many external factors. These include but are not limited to; the impact from geopolitical conflicts; our customers’ capital expenditures; environmental, social and other sustainability policies and initiatives; world economic, political, trade, and weather conditions; the price of oil, natural gas, and alternatives; member-country quota compliance within the Organization of Petroleum Exporting Countries and the expanded alliance (OPEC+); and, non-OPEC+ investments and project timing. 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 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. While we remain cautious on our activity profile as we calibrate macroeconomic conditions with customer demand, we are confident that adoption of our differentiated technologies and market penetration will provide a pathway to long-cycle growth. We continue to closely monitor and adapt to macroeconomic and trade conditions, potential supply chain disruptions, inflationary factors, and other labor and logistical constraints that could impact our operations and results. 30 Table of Contents Liquidity and Capital Resources 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: Six Months Ended June 30, (Dollars in millions) 2025 2024 Net Cash Provided by Operating Activities $ 270 $ 281 Net Cash Used in Investing Activities $ (36) $ (115) Net Cash Used in Financing Activities $ (230) $ (289) Operating Activities 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 $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 $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. 31 Table of Contents Sources of Liquidity Our sources of available liquidity include cash generated by our operations, cash and cash equivalent balances, and periodic accounts receivable factoring. From time to time, we may enter into transactions to dispose of businesses or capital assets that no longer fit our long-term strategy. We historically have accessed banks for short-term loans and the capital markets for debt and equity offerings. Based upon current and anticipated levels of operations and collections, we expect to have sufficient cash from operations and cash on hand to fund our cash requirements (discussed below), both in the short-term and long-term. Cash Requirements Our cash requirements will continue to include payments for principal and interest on our long-term debt, capital expenditures, payments on our finance and operating leases, payments for short-term working capital needs, operating costs and restructuring payments. We expect to utilize cash in our capital allocation framework, which includes investments in technology and infrastructure upgrades, and in strategic mergers and acquisitions. Our cash requirements also include personnel costs, including awards under our employee incentive programs and other amounts to settle litigation related matters. 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 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. Our capital spend is expected to be 3-5% of revenue over a 12 to 18 month rolling period and our 2025 capital spend is projected to be within the same framework. Our payments on our operating and finance leases in 2025 are expected to be approximately $62 million and $35 million, respectively. Cash and cash equivalents and restricted cash are held by subsidiaries outside of Ireland. 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. Repatriation of those cash balances might result in incremental taxes or losses. Ratings Services’ Credit Ratings Our credit ratings at December 31, 2024 have been maintained as follows: • Standard and Poor (“S&P) and Fitch Ratings (“Fitch”) maintain issuer credit ratings of ‘BB-;’ S&P maintained a positive outlook and Fitch maintained a stable outlook • Moody's Investors Service (Moody's) maintained a Corporate Family Rating of Ba3 and a positive outlook Customer Receivables We may experience delays or defaults in customer payments due to, among other reasons, a weaker economic environment, reductions in our customers’ cash flow from operations, our customers’ inability to access credit markets or reach acceptable financing terms, as well as unsettled political and/or social conditions. Allowances have been recorded for receivables believed to be uncollectible, including amounts for the resolution of potential credit and other collection issues such as disputed invoices. Adjustments to the allowance are made depending on how potential issues are resolved and the financial condition of our customers. 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. 32 Table of Contents 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. The balances due are not in dispute, however, additional or continued delays in customer payments in the future could differ from historical practice and management’s current expectations; and delays or failures to pay or defaults, if any, could negatively impact the future results of the Company. 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. Accounts Receivable Factoring 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 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. Guarantees Our 2030 Senior Notes were issued by Weatherford International Ltd. (“Weatherford Bermuda”) and guaranteed by the Company and other subsidiary guarantors party thereto. On December 1, 2022, the indenture related to our 2030 Senior Notes was amended and supplemented to add Weatherford International, LLC (“Weatherford Delaware”) as co-issuer and co-obligor, and concurrently released the guarantee of Weatherford Delaware. Credit Agreement, Letters of Credit and Surety Bonds Weatherford Bermuda, Weatherford Delaware, Weatherford Canada Ltd. (“Weatherford Canada”) and WOFS International Finance GmbH (“Weatherford Switzerland”), together as borrowers, and the Company as parent, have an amended and restated credit agreement (the “Credit Agreement”). 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 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 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). As of December 31, 2024, we had zero borrowings outstanding under the Credit Agreement and $382 million of letters of credit. The letters of credit consisted of $279 million for performance letters of credit and $12 million for financial letters of credit under the Credit Agreement and $91 million of letters of credit under various uncommitted bi-lateral facilities ($49 million of which was cash collateral held and recorded in “Restricted Cash” on the Condensed Consolidated Balance Sheets). 33 Table of Contents We utilize surety bonds as part of our customary business practice in certain regions, primarily Latin America. 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. Forward-Looking Statements This report contains various statements relating to future financial performance and results, business strategy, plans, goals and objectives, including certain projections, business trends, our shareholder returns program, and other statements that are not historical facts. 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. Forward-looking statements reflect our beliefs and expectations based on current estimates and projections. While we believe these expectations, and the estimates and projections on which they are based, are reasonable and were made in good faith, these statements are subject to numerous risks and uncertainties. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecasted in the forward-looking statements. The forward-looking statements included herein are only made as of the date of this report, or if earlier, as of the date they were made, and we undertake no obligation to correct, update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except to the extent required under federal securities laws. The following, together with disclosures under the heading “Item 1A. Risk Factors” in our 2024 Form 10-K, Part I, and “Part II – Other Information – Item 1A. Risk Factors” of this Form 10-Q, sets forth certain risks and uncertainties relating to our forward-looking statements that may cause actual results to be materially different from our present expectations or projections: • global political, economic and market conditions, political disturbances, war or other global conflicts, terrorist attacks, changes in global trade policies, tariffs and sanctions, weak local economic conditions and international currency fluctuations (including the Russia Ukraine Conflict and conflicts in the Middle East); • general global economic repercussions related to U.S. and global inflationary pressures and potential recessionary concerns; • failure to ensure on-going compliance with current and future laws and government regulations, including but not limited to those related to the Russia Ukraine Conflict, and environmental and tax and accounting laws, rules and regulations; • 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; • our ability to comply with, and respond to, climate change, environmental, social and governance and other “sustainability” initiatives and future legislative and regulatory measures both globally and in the specific geographic regions in which we and our customers operate; • 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; • the price and price volatility of, and demand for, oil, natural gas and natural gas liquids; • member-country quota compliance within the Organization of Petroleum Exporting Countries; • our ability to realize expected revenues and profitability levels from current and future contracts; • our ability to generate cash flow from operations to fund our operations; • 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; • our ability to realize cost savings and business enhancements from our revenue and cost improvement efforts; • our ability to effectively execute our capital allocation framework; 34 Table of Contents • our ability to attract, motivate and retain employees, including key personnel; • our ability to access the capital markets on terms that are commercially acceptable to the Company; • our ability to manage our workforce, supply chain challenges and disruptions, business processes, information technology systems and technological innovation and commercialization, including the impact of our organization restructure, business enhancements, improvement efforts and the cost and support reduction plans; • our ability to return capital to shareholders, including those related to the timing and amounts (including any plans or commitments in respect thereof) of any dividends and share repurchases; • our ability to service our debt obligations; • potential non-cash asset impairment charges for long-lived assets, intangible assets or other assets; • adverse weather conditions in certain regions of our operations; and • 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. Many of these factors are macroeconomic in nature and are, therefore, beyond our control. Should one or more of these risks or uncertainties materialize, affect us in ways or to an extent that we currently do not expect or consider to be significant, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this report as anticipated, believed, estimated, expected, intended, planned or projected. Finally, our future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in our current and past filings with the SEC under the Exchange Act and the Securities Act of 1933, as amended.