OIS — Oil States International, Inc.

Summary of Oil States Q2 2026 Earnings Call

1. Key Financial Results and Metrics:

• Revenue: $157 million, up 8% sequentially.
• Adjusted EBITDA: $19 million, up 14% sequentially.
• Net Income: $6 million ($0.10 per share); adjusted net income was $8 million ($0.14 per share) after excluding certain charges.
• Backlog: Increased to $451 million, the highest in over a decade, with a book-to-bill ratio of 1.2x.
• Cash Position: $20 million in cash, $18 million in outstanding debt.
• Free Cash Flow Guidance: Expected to be $35 million to $40 million for the full year, with potential additional cash from asset sales.

2. Strategic Updates and Business Highlights:

• The company is focusing on higher-margin, differentiated products, with over 70% of revenues in H1 2026 coming from offshore and international activities.
• The Offshore Manufactured Products segment showed strong performance, with revenues of $93 million and an EBITDA margin above 19%.
• The Completion and Production Services segment reported revenues of $24 million with a 27% EBITDA margin.
• The Downhole Technologies segment saw improved revenues of $40 million, driven by increased demand for perforating and completion products.
• The company is investing selectively in technologies to enhance performance and efficiency.

3. Forward Guidance and Outlook:

• Q3 2026 Revenue Guidance: Expected to be between $157 million and $167 million; adjusted EBITDA between $18 million and $20 million.
• Full-Year 2026 Guidance: Revenue expected to range from $640 million to $660 million; adjusted EBITDA between $77 million and $83 million.
• The company anticipates continued growth in offshore deepwater and international markets, with a focus on converting backlog into revenue.

4. Bad News, Challenges, or Points of Concern:

• Ongoing geopolitical tensions, particularly in the Middle East, have caused contract award delays, impacting revenue recognition timelines.
• Elevated input costs for raw materials, particularly in the Downhole Technologies segment, are pressuring margins.
• Working capital investments of $27 million in H1 2026 may hinder free cash flow in the short term, although a reversal is expected in the second half of the year.

5. Notable Q&A Insights:

• Management expressed optimism about achieving higher EBITDA margins in the future, potentially reaching the low 20s as backlog increases.
• The Downhole Technologies segment's recent revenue growth is attributed more to an improving U.S. land market rather than restructuring efforts.
• The military products segment is expected to continue generating significant revenue, with ongoing smaller orders alongside larger multi-year contracts.
• The company is cautiously optimistic about the U.S. land market, noting that operators are being careful with capital spending due to oil price volatility.

Overall, Oil States is navigating a complex market environment with a strong focus on strategic growth in offshore and international segments, while managing challenges related to geopolitical risks and input costs.