Weatherford International plc

Ladies and gentlemen, thank you for standing by. Welcome to the Weatherford International Third Quarter 2025 results. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad, and to withdraw your question, please press star then two. We do also ask that you please limit yourself to one question. As a reminder, today's event is being recorded. I would now like to turn the conference over to Luke Lemoine, Senior Vice President of Corporate Development.

Please go ahead, sir. Welcome, everyone, to the Weatherford International Third Quarter 2025 Earnings Conference Call. I'm joined today by Gurish Seligram, President and CEO, and Anuj Dhru, Executive Vice President and CFO. We'll start today with our prepared remarks and then open it up for questions. You may download a copy of the presentation slides corresponding to today's call from our website's investor relations section. I want to remind everyone that some of today's comments include forward-looking statements. These statements are subject to many risks and uncertainties that could cause our actual results to differ materially from any expectation expressed herein. Please refer to our latest Securities and Exchange Commission filings for risk factors and cautions regarding forward-looking statements. Our comments today also include non-GAAP financial measures. The underlying details and a reconciliation of GAAP to non-GAAP financial measures are included in our earnings press release or accompanying slide deck, which can be found on our website. As a reminder, today's call is being webcast, and a recorded version will be available on our website's investor relations section following the conclusion of this call. With that, I'd like to turn the call over to Girish.

Thanks, Luke, and thank you all for joining our call. I'll start with an overview of our performance and key highlights, and we'll then share our outlook on the markets. Anuj will then cover specifics on financial performance, balance sheet, detailed guidance, and I will wrap up with some thoughts on Weatherford's operating plans for this environment before opening for Q&A. As illustrated on slide three, our third quarter results were above the expectations that we outlined in July. Despite continued market headwinds and a soft macro environment, the One Weatherford team delivered strong performance and I'm incredibly grateful for the team's unwavering spirit, customer focus, and operating intensity. In Q3, North America was up slightly sequentially due to the seasonal Canadian rebound, along with a slight improvement in the North America offshore business. However, this was partially offset by a decline in U.S. land. After three-quarters of declining revenue in Latin America, this geo-market improved revenues by 10% sequentially, primarily due to an improvement in Mexico. Mexico revenues will still be down in the 60% range this year. However, the past two quarters have seen sequential revenue improvements in the country. We believe we are now at a point of relative stability with cautious optimism for slight improvements into 2026. The ESSR region was relatively flat quarter on quarter, with a number of countries helping to offset the continued weakness in the UK. I continue to be pleased with our performance in the broader MENA region, and Asia region as it posted another quarter of sequential growth led by the UAE, Qatar, Australia, and Thailand. We believe Saudi Arabia is in the process of bottoming, and I'm hopeful we can get back to year-on-year growth in the second half of next year. Despite overall market headwinds, I believe the MENA Asia region can again show growth in Q4 for us. We continue to see margin dilution from tariff cost pass-throughs, but have managed to keep overall margin dollars reasonably intact. There is rising pricing pressure in several markets, and while that might create short-term issues, we are confident in our ability to drive differentiation as a means to offset. We have previously talked about the acceleration of our cost initiatives, and despite the tariff and pricing pressures, this has helped significantly, evidenced by EBITDA margin expansion of over 70 BIPs. Our team did a terrific job of focusing on working capital and capex that enabled adjusted free cash flow of $99 million despite lack of payments from Mexico. We had mentioned that this was a timing concern back in July, but I'm very pleased with the way our team executed to offset this impact. Since the end of the quarter, we have seen tangible progress in payments from Mexico as the new process begins to take effect. That said, there remains a possibility that some payments for 2024 receivables could be deferred into 2026, and we have taken that into account in our adjusted free cash flow projections. As shown on slide six, we have now paid four quarterly dividends of 25 cents per share and repurchased approximately $193 million worth of shares over the past five quarters, which includes approximately $7 million during Q3. While this amount may vary each quarter due to market conditions, we remain committed to our buyback program and still have sufficient capacity under our $500 million authorization. Now turning to our segment overview on slides eight through 11. The operational and technical highlights showcase advancements in new market penetration, technology adoption, and continued innovation of our product and services portfolio. As noted in our earnings release, our continued success in securing high impact contracts across key regions reflects the strength of our technology and the trust of our customers. In Deepwater, Brazil, Petrobras awarded Weatherford a three-year, $147 million contract to deliver tubular running services. In Romania, Romgas awarded Weatherford an eight-year contract to provide real-time monitoring services and transmission of dynamic parameters from the wellheads of gas wells. In the Gulf of America, Thalos Energy awarded Weatherford a contract to provide managed pressure drilling and tubular running services in their operations. Finally, at our Forward 2025 conference, we demonstrated innovation as a catalyst for long-term value creation. This event is now a showcase of our technology capabilities, but more importantly, a thought leadership forum with several senior delegates from customer organizations. We launched over 20 new products and extensions across our segments. From a more robust rotary steerable offering to our new OptiMax well-controlled barrier valve to MARS, which enables mature field rejuvenation with sophisticated fiber optic surveillance, We are driving the next phase of the company's growth based on innovation. I'm especially excited about intelligent completions and our digital launches, both of which have a very long runway of opportunity. Now turning to our outlook. For the past couple of quarters, we have provided what we believed was a prudent view, and we continue to believe this outlook remains reasonable in today's market. While we've seen a positive impact from excellent operational execution, the overall market remains soft. Customer spending trends for the next year remain uncertain, and we are seeing pricing pressure in certain pockets. Trade discussions continue to cause significant uncertainty and may lead to further demand destruction in the short to mid-term. We began to see larger tariff impacts in the third quarter with impacts on volumes, cost increases, and margin dilution in specific U.S. product lines. Lastly, OPEC Plus continues adding supply back to the market increasing pressure on the global oil supply-demand balance. We believe the softness will persist for the next several months, and coupled with seasonality, will result in year-on-year comparisons being down in the first half of 2026. However, we are hopeful that offshore activity, as well as incremental onshore activity driven by the rebalancing of supply and demand, will create improvement into the second half of 2026. We also remain hopeful that the industry discipline of recent years will result in a milder global downturn than the last three cycles. We have continued to adapt our cost structure over the past four quarters, and this will further evolve as the market unfolds. Since the third quarter of last year and excluding divestitures, we have reduced our headcount by over 2,000 and lowered our annualized personnel expenses by more than $145 million. While much of this is offset by revenue declines, our swift actions have positioned us to continue operating efficiently. This ought to enable us to continue to deliver strong margins, such as we did as in Q3, while generating strong cash flows even when faced with revenue declines. We continue to believe we are very well positioned to capitalize on stable or improving activity levels, but we are also taking proactive steps to ensure we can respond swiftly in the event of a more pronounced slowdown. I'd like to turn the call over to Anuj before I come back with closing comments.