Weatherford International plc

Ladies and gentlemen, thank you for standing by. Welcome to the Weatherford First Quarter 2026 Results Conference Call. All participants will be in a 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 and then one on your telephone keypads. To withdraw your questions, you may press star and two. As a reminder, today's event is being recorded. At this time, I'd like to turn the conference call over to Luke Lemoine, Senior of Corporate Development. Sir, you may begin.

Welcome, everyone, to the Weatherford International First Quarter 2026 Earnings Conference Call. I'm joined today by Grace Sellegram, President and CEO, and Anoush 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 company 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 financial and operational performance, followed by a short-term 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 the current operating environment and structural market dynamics before opening for Q&A. To summarize our Q1 2026 performance, we delivered revenue of $1.152 billion, adjusted EBITDA of $233 million at a 20.2% margin, and adjusted free cash flow of $85 million. I would like to thank all of our One Weatherford team, and especially our Middle East-based employees, for their focus on customers, safety, and operational discipline in a complex and challenging environment. I would also like to highlight our announcement during the quarter of a proposal to re-domesticate from Ireland to the United States, specifically Texas, which we believe will simplify our corporate structure, enhance capital management flexibility, and support long-term shareholder value creation. As illustrated on slide three, revenue declined 3% on a year-on-year basis, but it is important to note that it was predominantly driven by the divestiture of the pressure pumping business in Argentina. On a sequential basis, revenues were down 11%, reflecting typical first quarter seasonality and the conflict in Iran, partly offset by continued strength in parts of our international portfolio and some second quarter opportunities that materialized earlier in the first. North America was modestly softer as operators maintained tight budgets and U.S. land activity remained under pressure. Latin America declined sequentially, as expected, but this was partly offset by higher artificial lift in Argentina. In Mexico, we continued to make meaningful progress in the first quarter. Collections remained strong and consistent, reinforcing our confidence in the new payment mechanisms we discussed on our last call. This not only supported our Q1 cash flow performance, but also contributed to a sequential improvement in working capital efficiency. The Middle East, North Africa, and Asia region was impacted by the Iran conflict in the Middle East, which drove delays, dropped drilling and work over activity, and resulted in project suspensions in multiple countries. Since the start of the recent Iran conflict and over the course of the past few weeks, our priority has been the safety and security of our employees and ensuring business continuity to the extent it was feasible. Each country in the Middle East has been impacted in different ways. and we have taken actions in close coordination with customers and advice from local authorities. While the drop in revenue and resultant high decremental margins are the most obvious manifestation financially, we are also working through additional complexities. Trade costs have risen dramatically, and with logistical disruptions, there are both delays and higher costs in moving materials and people to the appropriate locations. With a strong manufacturing, supply chain base, and local expertise in the region, we were able to navigate the first month of the conflict well. There was a financial impact, but that has been offset through contributions from the rest of the international regions and other items in the first quarter. However, with the prolonged nature of the conflict, the impact of lead times, inventory drawdowns, logistical bottlenecks, the impact is expected to show more clearly in the second quarter both in the region and to shipments outside the region. With the assumption that the conflict is behind us and activity starts to normalize towards the latter part of the quarter, we believe the conflict would result in about $30 million to $50 million profit impact over the first half of the year. However, we are very encouraged about second half 2026, along with increasing confidence in activity levels in 2027. As the region rebounds in response to a growing need for energy security, we believe we will be well-positioned to assist our customers in their efforts to normalize operations and provide that energy to the world. From a segment perspective, WCC revenue is largely flat year-over-year, with higher liner hanger activity partly offsetting lower cement position products and TRS activity in MENA. DRE revenue declined 8% year-over-year, primarily from lower activity in Latin America, MENA, and North America, partly offset by higher wireline and drilling services activity in Europe. PRI revenue declined 11% year over year, mostly driven by the sale of our pressure pumping business in Argentina, partly offset by higher subsea intervention activity. Across all three segments, our product lines continue to benefit from differentiated technology, a strong installed base, and the operational and manufacturing capability we have built over the past several years. Our first quarter adjusted EBITDA margin came in at 20.2%. Typical Q1 seasonality resulted in lower margins, and that was further exacerbated starting in March by the Iran conflict. We remain focused on productivity and cost actions to support margin performance. And barring the Iran conflict persisting, we believe they will result in margin expansion in the second half of 2026. We are also taking further actions to fine-tune our portfolio through a series of small non-core divestitures. These will each be smaller than our Argentina pressure pumping divestiture, but divesting these businesses should remove lower margin revenue from our portfolio base, reduce capital intensity, and align with our strategic priorities. Our adjusted free cash flow for the first quarter was $85 million, which was supported by very strong collections across most of our geographies, including continued progress on payments from our largest customer in Mexico. Importantly, our Q1 working capital efficiency improved by approximately 100 basis points sequentially, reflecting disciplined execution and the positive impact of continued strong collections. We believe free cash flow conversion will improve for the full year versus our prior expectations, with continued progress towards a 50% through cycle target. Turning to our segments, slide seven through nine layout key highlights. During the quarter, we continue to build momentum with new contract wins across our portfolio and key regions. These wins are a testament to our operational and technical capabilities to deliver a range of differentiated technology and cost-effective solutions for our customers. I'm especially encouraged by key awards this quarter, including a multi-year integrated completions contract with Total Energies in Denmark, a five-year TRS contract with Foucault POC in Vietnam, and a multi-year contract with Shell to provide artificial lift in Argentina. On the operational side in our PRI segment, we completed the first AlphaV casing system deployment in the UK sector of Liverpool Bay. We also achieved important milestones in the Kingdom of Saudi Arabia, where we set a new global record for extended-reach Y-line work, logging over 29,000 feet measured depth with our compact well shuttle system. Successfully executed the first rigless through-cubing sand-controlled gravel back there, restoring a shut-in gas well without a work-over rig. And we also successfully trialed our rod lift system at the Jafura gas field. Now turning to our outlook. As we near the second half, we are encouraged by a number of contract awards and project startups that should lead to noticeable second half growth over the first half. However, it goes without saying that the conflict in the Middle East must conclude and operations must normalize to pre-conflict levels. These startups in the second half include Argentina, UAE, Brazil, Australia, Indonesia, and Egypt. We are encouraged that second half 2026 international revenues could possibly be up year on year and are constructive on 2027 being a year of growth. Furthermore, we have seen early signs of improvement in offshore deepwater activity, underpinned by rising service-related demands in core basins such as Gulf of America, Brazil, the Caribbean, and the Caspian Sea. With that, I'd like to turn the call over to Anuj.