What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-22 compared with 2025-07-23 · 136 added, 122 removed, 306 unchanged (46% 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 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.

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

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

Henry Hub natural gas prices increased as of September 30, 2025 compared to September 30, 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.

In addition to the impact of lower oil prices, 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.

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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.

In addition, the Company is actively pursuing strategies to mitigate the impact of tariffs on our results of operations, including supplier negotiations, evaluation of sourcing options, including foreign zones and bonded warehouses where feasible, development of tools to monitor and address tariff impact during the quoting process, seeking compensation from customers for tariffs, pursuing trade agreement certifications and exemptions, and supporting industry association advocacy for consideration of oilfield services products in trade negotiations.

However, it is uncertain whether the actions taken or contemplated to be taken by the Company will be effective in mitigating the impact of current and future trade restrictions on the Company’s results of operations.

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,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

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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 Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

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International (1)

1,080 1,151 1,085 1,171

Worldwide 1,798 1,947 1,825 1,959

(1) Prior period international rig count figures were adjusted by Baker Hughes in the third quarter of 2025.

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.

Revenues in Russia were approximately 8% and 7% of our total revenues for the three and nine months ended September 30, 2025, respectively, compared to 6% and 5% of our total revenue for the three and nine months ended September 30, 2024, respectively.

As of September 30, 2025, our Russia operations included $94 million in cash, $151 million in other current assets, $74 million in property, plant and equipment, net and other non-current assets, and $62 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, net 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.

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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.

Revenues of $1.2 billion and $3.6 billion in the three and nine months ended September 30, 2025, respectively, decreased 13% in both periods compared to $1.4 billion and $4.2 billion in the three and nine months ended September 30, 2024, respectively.

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

For the same period, revenues declined in all segments with DRE, PRI and WCC impacting 50%, 25% and 23% of the decrease, respectively, with the remaining decrease due to a modest decline in integrated services and projects.

Year-over-year in the nine months ended September 30, 2025, product revenues decreased 11% and services revenues decreased 14%.

For the same period, revenues declined in all segments with DRE, WCC and PRI impacting 47%, 20% and 19% of the decrease, respectively, with the remaining decrease from lower activity in integrated services and projects.

Geographically, the year-over-year third quarter revenue decrease was led by a decline in the Latin America, North America, Middle East/North Africa/Asia and Europe/Sub-Sahara Africa/Russia regions, which impacted 81%, 13%, 5% and 1% of the decrease, respectively.

Year-over-year in the nine months ended September 30, 2025, the revenue decrease was led by a decline in the Latin America, North America, Europe/Sub-Sahara Africa/Russia and Middle East/North Africa/Asia regions, which impacted 79%, 9%, 7% and 4% 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.

Operating income of $178 million and $557 million in the three and nine months ended September 30, 2025, respectively, decreased 27% and 25% compared to $243 million and $740 million in the three and nine months ended September 30, 2024, respectively.

The third quarter year-over-year decrease was 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.

The nine months ended September 30, 2025 year-over-year decrease was 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 $844 million and $2.5 billion in the three and nine months ended September 30, 2025, respectively, decreased 8% and 7% compared to $917 million and $2.7 billion in the three and nine months ended September 30, 2024, respectively.

The year-over-year decrease was primarily due to decline in product sales and a reduction in headcount leading to lower personnel costs.

Our cost of products and services as a percentage of revenues was 69% in both the three and nine months ended September 30, 2025 compared to 65% in both the three and nine months ended September 30, 2024, respectively.

The higher cost ratio was due to costs decreasing at a slower rate than revenues.

Selling, general, administrative and research and development costs of $196 million and $580 million in the three and nine months ended September 30, 2025, respectively, decreased 17% and 19% compared to $236 million and $719 million in the three and nine months ended September 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.

Selling, general, administrative and research and development costs as a percentage of revenues was 16% in both the three and nine months ended September 30, 2025 compared to 17% in both the three and nine months ended September 30, 2024.

Gain on Sale of Business were nil and $70 million in the three and nine months ended September 30, 2025, respectively, due to the sale of our pressure pumping business in Argentina during the second quarter of 2025.

Restructuring charges were $11 million and $51 million in the three and nine months ended September 30, 2025, respectively, and nil and $8 million in the three and nine months ended September 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.

Other Charges, Net were $3 million and $19 million in the three and nine months ended September 30, 2025, respectively, and $13 million in both the three and nine months ended September 30, 2024.

Other Charges, Net primarily included 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.

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 was $23 million and $70 million in the three and nine months ended September 30, 2025, respectively, and $24 million and $77 million in the three and nine months ended September 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.

Interest expense was $34 million and $106 million in the three and nine months ended September 30, 2025, respectively, and $37 million $121 million in the three and nine months ended September 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.

Interest income was $11 million and $36 million in the three and nine months ended September 30, 2025, respectively, and $13 million and $44 million in the three and nine months ended September 30, 2024, respectively.

The year-over-year decrease was due to a reduction in our cash holdings in Argentina upon execution of the BCS.

See “Note 13 – Blue Chip Swap Securities - Argentina” for additional information.

Loss on Blue Chip Swap Securities

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

A 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.

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 nine months ended September 30, 2025 and $10 million in the nine months ended September 30, 2024, respectively.

During the third quarter of 2025 we entered into a series of BCS securities transactions that resulted in an immaterial impact to our financial statements.

No BCS securities transactions were entered into in the third quarter of 2024.

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.

Other Expense, Net was $16 million and $60 million in the three and nine months ended September 30, 2025, respectively, and $41 million and $83 million in the three and nine months ended September 30, 2024, respectively.

Other Expense, Net primarily represents foreign exchange gains and 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.

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Financial information by segment is summarized below.

Three Months Ended June 30, 2025

Three Months Ended September 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 .

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Reportable Segments All

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

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Reportable Segments All

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Share-based Compensation

Restructuring Charges

Other Charges, Net

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

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Reportable Segments All

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Restructuring Charges

Other Charges, Net

Operating Income $ 740

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Three Months Ended Variance

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

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

Revenue $ 346 $ 435 $ (89) (20) %

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Segment Adj EBITDA Margin 24.0 % 25.5 % n/m (153) bps

Six Months Ended Variance

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

Nine Months Ended Variance

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

Revenue $ 1,031 $ 1,284 $ (253) (20) %

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Segment Adj EBITDA Margin 21.9 % 28.9 % n/m (697) 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.

DRE revenues of $346 million and $1,031 million in the three and nine months ended September 30, 2025, decreased $89 million or 20%, and decreased $253 million or 20% compared to $435 million and $1,284 million in the three and nine months ended September 30, 2024, respectively.

Of the third quarter year-over-year revenue decrease, approximately 50% of the decrease was from lower activity in drilling-related services and approximately 40% of the decrease was attributable to a decline in activity for managed pressure drilling.

Geographically, approximately 85% 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.

Of the year-to-date year-over-year revenue decrease, approximately 50% of the decrease was from lower activity in drilling-related services and approximately 30% decrease was attributable to a decline in activity for managed pressure drilling.

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.

DRE segment adjusted EBITDA of $83 million and $226 million in the three and nine months ended September 30, 2025, decreased $28 million or 25%, and decreased $145 million or 39%, compared to $111 million and $371 million in the three and nine months ended September 30, 2024, respectively.

DRE segment adjusted EBITDA margin was 24.0% and 21.9% in the three and nine months ended September 30, 2025 compared to 25.5% and 28.9% in the three and nine months ended September 30, 2024, respectively.

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

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

The rate of decrease for direct costs was the same as the rate of decrease in revenue.

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

Year-to-date, 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.

Three Months Ended Variance

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

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

Revenue $ 468 $ 509 $ (41) (8) %

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Segment Adj EBITDA Margin 26.7 % 29.7 % n/m (296) bps

Six Months Ended Variance

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

Nine Months Ended Variance

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

Revenue $ 1,365 $ 1,471 $ (106) (7) %

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Segment Adj EBITDA Margin 27.2 % 28.3 % n/m (110) 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.

WCC revenues of $468 million and $1,365 million in the three and nine months ended September 30, 2025, decreased $41 million or 8%, and decreased $106 million or 7%, compared to $509 million and $1,471 million in the three and nine months ended September 30, 2024, respectively.

Of the third quarter year-over-year revenue decrease, approximately 60% of the decrease was from lower activity in cementation products and approximately 35% of the decrease was attributable to a decline in activity for completions.

Geographically, approximately 55% of the revenue decrease was from Latin America and approximately 25% of the revenue decrease was from Europe/Sub-Sahara Africa/Russia.

The remaining decrease was 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 cementation products and completions which impacted approximately 50% and 45% of the decrease, respectively.

This was partly offset by revenue increase from well services activity.

Geographically, of the regions with revenue decreases, approximately 50% of the decrease was from Latin America, 30% from Europe/Sub-Sahara Africa/Russia and 20% from North America.

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.

WCC segment adjusted EBITDA of $125 million and $371 million in the three and nine months ended September 30, 2025, decreased $26 million or 17%, and decreased $45 million or 11%, compared to $151 million and $416 million in the three and nine months ended September 30, 2024, respectively.

WCC segment adjusted EBITDA margin was 26.7% and 27.2% in the three and nine months ended September 30, 2025, compared to 29.7% and 28.3% in the three and nine months ended September 30, 2024, respectively.

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

The 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 third 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.

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Three Months Ended Variance

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

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

Revenue $ 326 $ 371 $ (45) (12) %

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Segment Adj EBITDA Margin 18.1 % 22.4 % n/m (427) bps

Six Months Ended Variance

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

Nine Months Ended Variance

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

Revenue $ 987 $ 1,088 $ (101) (9) %

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Segment Adj EBITDA Margin 18.6 % 22.2 % n/m (351) 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.

PRI revenues of $326 million and $987 million in the three and nine months ended September 30, 2025, decreased $45 million or 12% and decreased $101 million or 9% compared to $371 million and $1,088 million in the three and nine months ended September 30, 2024, respectively.

The third 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 50% and 45% of the decrease, respectively, among product lines within the segment that experienced year-over-year decreases.

The sale of our pressure pumping business in Argentina in the second quarter 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 65% 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.

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 the remaining decrease primarily from lower pressure pumping activity which impacted approximately 40% of the decrease.

This 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 $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.

PRI segment adjusted EBITDA of $59 million and $184 million in the three and nine months ended September 30, 2025, decreased $24 million or 29% and decreased $57 million or 24% compared to $83 million and $241 million in the three and nine months ended September 30, 2024, respectively.

PRI segment adjusted EBITDA margin was 18.1% and 18.6% in the three and nine months ended September 30, 2025, compared to 22.4% and 22.2% in the three and nine months ended September 30, 2024.

The third 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.

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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.

All Other revenues were $92 million and $246 million in the three and nine months ended September 30, 2025, compared to $94 million and $329 million in the three and nine months ended September 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.

Corporate incurred net expense of $12 million and $42 million in the three and nine months ended September 30, 2025 compared to $13 million and $45 million in the three and nine months ended September 30, 2024.

The year-over-year decreases 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.

Depreciation and amortization expense was $67 million and $193 million in the three and nine months ended September 30, 2025 compared to $89 million and $260 million in the three and nine months ended September 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.

We recognized $10 million and $26 million of share-based compensation in the three and nine months ended September 30, 2025 compared to $10 million and $35 million in the three and nine months ended September 30, 2024.

The year-over-year decrease was 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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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 market has softened over the past nine 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+ unwound voluntary oil production cuts and potential new supply additions.

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.

In the near term, we anticipate an ongoing emphasis on capital discipline and operational efficiencies worldwide to continue exerting downward pressure on demand for our services and products throughout the remainder of 2025 into the first half of 2026.

Additionally, trade policy uncertainty in our industry and in relation to global economic outlook will continue to 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 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.

At September 30, 2025, we had cash and cash equivalents of $967 million and $64 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,

Nine Months Ended September 30,

(Dollars in millions) 2025

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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.

Cash provided by operating activities was $408 million for the nine months ended September 30, 2025 compared to cash provided by operating activities of $543 million for the nine months ended September 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 and slowdown in payments from our largest customer in Mexico, partially offset by lower employee costs.

During both the nine months ended September 30, 2025 and September 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 $459 million during the nine months ended September 30, 2025 and September 30, 2024, respectively.

Factoring arrangements related to certain receivables during both the nine months ended September 30, 2025 and September 30, 2024 resulted in cash proceeds at the time of factoring of $231 million and $54 million, respectively.

Investing Activities

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

Cash used in investing activities was $82 million for the nine months ended September 30, 2025.

The primary investing use of cash was for capital expenditures of $175 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.

Cash used in investing activities also includes the use of the BCS mechanism in Argentina, of which the purchases of $103 million offset the proceeds of $102 million, resulting in a loss of $1 million during the nine months ended September 30, 2025 (see “Note 13 – Blue Chip Swap Securities - Argentina”).

Cash used in investing activities was $207 million for the nine months ended September 30, 2024.

The primary investing activities were cash used for capital expenditures of $199 million and cash used for acquisitions net of cash acquired, of $51 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.

Cash used in investing activities also includes the use of the BCS 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 nine months ended September 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.

Cash used in financing activities was $277 million for the nine months ended September 30, 2025.

The primary financing uses of cash were for share repurchases of $94 million (see “Note 9 – Shareholders’ Equity”), repayments and repurchases of long-term debt of $80 million (including $61 million in repurchases of our 2030 Senior Notes, see “Note 7 – Borrowings and Other Debt Obligations”), cash dividends of $54 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.

Cash used in financing activities was $378 million for the nine months ended September 30, 2024.

The primary financing uses of cash were for repayments and repurchases of long-term debt of $264 million and share repurchases of $50 million.

Sources of Liquidity

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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.

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

Subsequent to September 30, 2025, we issued $1.2 billion of 2033 Senior Notes and redeemed $893 million of our 2030 Senior Notes.

We expect to pay $120 million in interest payments in 2025 specific to these notes which includes $68 million paid for interest on our 2030 Senior Notes during the nine months ended September 30, 2025.

See “Note 7 – Borrowings and Other Debt Obligations” and “Note 14 – Subsequent Events” 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.

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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.

At September 30, 2025 and December 31, 2024, we had approximately $36 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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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

Our credit ratings at December 31, 2024 have been upgraded through September 30, 2025 as follows:

• Moody's Investors Service upgraded our Corporate Family Rating from ‘Ba3’ to ‘Ba2;’ with a positive outlook

• Standard and Poor upgraded our issuer credit ratings from ‘BB-’ to ‘BB;’ with a stable outlook

• Fitch Ratings upgraded our issuer credit ratings from ‘BB-’ to ‘BB;’ with a stable outlook

Customer Receivables

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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 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 net accounts receivables in Mexico were 37% and 31% of our total net accounts receivables, as of September 30, 2025 and December 31, 2024, respectively, of which our largest customer in the country accounted for 34% and 26% of our total net outstanding accounts receivables, respectively.

Mexico continues to account for a large and increased percentage of our receivables despite dropping below 10% of total revenues for the three and nine months ended September 30, 2025 due to further payment delays from our largest customer in Mexico.

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 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.

During the nine months ended September 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 nine months ended September 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 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.

During the three and nine months ended September 30, 2025, we sold accounts receivable balances of $91 million and $234 million, and received cash proceeds of $90 million and $231 million, respectively, at the time of factoring.

During the three and nine months ended September 30, 2024, we sold accounts receivable balances of $4 million and $55 million, and received cash proceeds of $4 million and $54 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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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.

On October 6, 2025, the 2033 Senior Notes were issued by Weatherford Bermuda and guaranteed by the Company and other subsidiary guarantors party thereto.

The details of this transaction can be found in “Note 14 - Subsequent Events”.

Credit Agreement, Letters of Credit and Surety Bonds

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

At 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).

On September 18, 2025, we amended the Credit Agreement to (i) allow for an increase in total commitment amount from $720 million to $1 billion comprised of $600 million to be used either for revolving loans or financial letters of credit and $400 million to be used for performance letters of credit, (ii) extend the maturity date to the earlier of September 18, 2030 or January 29, 2030 if more than $200 million of 2030 Senior Notes or Permitted Refinancing Indebtedness are outstanding on that date and (iii) include an accordion feature that will allow for further increases of commitments up to $1.15 billion.

As of September 30, 2025, under the Credit Agreement we had zero borrowings, $6 million in financial letters of credit and $255 million in performance letters of credit outstanding.

Additionally as of September 30, 2025, we had $179 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, under the Credit Agreement we had zero borrowings, $12 million in financial letters of credit and $279 million in performance letters of credit outstanding.

Additionally as of December 31, 2024, we had $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).

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.

As of September 30, 2025 and December 31, 2024, we had surety bonds outstanding of $503 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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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