Helmerich & Payne (HP) Q1 2026 earnings summary

Executive summary

• Adjusted EBITDA for Q1 2026 was $230 million, exceeding expectations due to strong performance in North America, offshore, and international segments, with margin improvements in Saudi Arabia and the Jafurah Gas Field.

• Revenue reached $1.02 billion for the third consecutive quarter, driven by operational execution, technology leadership, and a major acquisition.

• Net loss of $97 million, or $0.98 per share, primarily due to a $103 million non-cash impairment charge related to rig rationalization and acquisition-related costs; adjusted net loss was $14 million, or $0.15 per share.

• Leadership transition announced: John Lindsay retires as CEO, with Trey Adams set to assume the role, emphasizing continuity in strategy and culture.

• FlexRobotics, an automated drilling technology, was successfully deployed in the Permian Basin for a Super Major, with strong customer interest and further rollout planned.

Financial highlights

• Q1 2026 revenue: $1.02 billion; Adjusted EBITDA: $230 million (23% margin); net loss of $97 million or $0.98 per share; adjusted loss per share: $0.15.

• Free cash flow was $126 million, with capital expenditures at $57–$68 million, below the sequential run rate.

• Paid down $260 million of a $400 million term loan, ahead of schedule, with $140 million remaining due January 2027.

• $25 million returned to shareholders via dividends during the quarter.

• Non-cash impairment charges of $103 million recorded, primarily for assets reclassified as held-for-sale and rig rationalization.

Outlook and guidance

• Q2 2026 guidance: North America Solutions direct margin $205M–$230M, rig count 132–138; International Solutions direct margin $12M–$22M, rig count 57–63; Offshore margin $20M–$30M.

• Expect margin and activity improvement in the second half of FY 2026, with international direct margin projected to exceed $45 million per quarter post-Saudi reactivations.

• 2026 gross capital expenditure budget trimmed to $270M–$310M, a 30%+ reduction vs. FY'25.

• Seven rigs in Saudi Arabia scheduled to resume operations in the first half of 2026, with six expected operational by mid-year.

• Market uncertainty persists due to global tariffs, OPEC+ supply actions, and geopolitical tensions.