Oil States International, Inc.

Pennington, VP of Human Resources. You may begin.

Thank you, JL. Good morning and welcome to Oil State's second quarter 2025 earnings conference call. Our call today will be led by our President and CEO, Cindy Taylor, Lloyd Hodgick, Oil State's Executive Vice President and Chief Financial Officer, and Scott Moses, our Executive Vice President and Chief Operating Officer. Before we begin, we would like to please note that we are relying on the safe harbor protections afforded by federal law. No one should assume that these forward-looking statements remain valid later in the quarter or beyond. Any such remarks should be weighed in the context of the many factors that affect our business, including those risks disclosed in our 2024 Form 10-K, along with other recent SEC filings. This call is being webcast and can be accessed at Oil State's website. A replay of the conference call will be available two hours after the completion of this call and will continue to be available for 12 months. I will now turn the call over to Cindy.

Thank you, Ellen. Good morning and thank you for joining our conference call today. We're going to be discussing our second quarter 2025 results and provide our thoughts on market trends in addition to discussing our company-specific strategy and outlook. In a quarter marked by geopolitical instability, lower crude oil prices, and fluctuating U.S. trade policies, offshore and international markets demonstrated resilience. With this backdrop, the company performed well, achieving the midpoint of our guided EBITDA range for the second quarter of 2025 due to our product and service mix. Our consolidated results in the second quarter were driven by continued strength of international and offshore activity supported by backlog growth over recent quarters. Oil States remains well positioned to benefit going forward as oil and gas operators favor capital allocation to offshore projects with higher production, slower decline curves, and lower break evens. During the second quarter, 72% of our consolidated revenues were generated from offshore and international projects up significantly sequentially and year over year. This shift in revenue mix reflects our strategic actions to grow our international project-driven revenues as well as our continuing initiative to optimize our U.S. land operations given lower industry activity levels and competitive market dynamics. U.S. land drilling and completion activity declined significantly during the period with the quarter end rig count down 8% and the frac spread count down 14% from March 31, 2025. These U.S. activity reductions stem from weaker crude oil prices driven by ongoing macroeconomic uncertainty and OPEC plus' decision to rapidly unwind over 2 million barrels per day of previous production cuts. The sustained margin benefits stemming from our U.S. land-based optimization efforts which were initiated in 2024 and have continued into 2025 are reflected in our results albeit tempered by the significant decline in U.S. oil-directed activities during the second quarter. Driven by strong demand across our international and offshore markets, our offshore manufacturer product segment delivered strong performance. Revenues increased 15% sequentially while adjusted segment EBITDA rose 18%. Backlog increased to 363 million, again allowing us to achieve our highest level since September 2015. Robust bookings of $112 million reflective of continued strength and offshore project activity yielded a quarterly book to bill ratio of 1.1 times and a year to date ratio of 1.2 times, reinforcing our sustained backlog build. The strength and diversity of our backlog supports our outlook for total company incremental revenue and earnings growth over the balance of 2025. Our completion and production services and down-hole technology segments which represent a smaller portion of our business mix experienced sequential quarter revenue declines of 15% and 10% respectively, primarily due to the significant industry-wide reduction in U.S. land-based activity levels. Responsive to market conditions, we made the strategic decision to exit three additional land-based facilities during the second quarter and to further reduce our U.S. land-focused workforce. During the second quarter, we grew our cash flow from operations 61% sequentially and we generated $8 million of free cash flow. Free cash flow together with cash on hand was used during the quarter to repurchase $7 million of our common stock and $15 million of our convertible senior notes. Our deleveraging efforts should unlock additional equity value to our stockholders as we approach net-deck zero and pay off our convertible senior notes at their maturity in April 2026. Our capital expenditures in the second quarter were elevated by the ongoing construction of our new manufacturing facility in Batam, Indonesia, which will complete in the third quarter along with the manufacture of our low-impact, work-over rental riser equipment built pursuant to contracts. We are committed to optimizing our operations and making targeted investments in our highest-performing operations while leveraging cutting-edge technologies to drive growth. Our commitment to technology and innovation was once again honored with a 2025 Meritorious Engineering Award from Heart Energy recognizing our low-impact, work-over package, which I mentioned earlier. This solution integrates proven field technologies to enhance subsea plug and abandonment operations while ensuring the integrity of aging wells. Lloyd will now review our operating results along with our financial position in more detail.