Helmerich & Payne (HP) Q3 2025 earnings summary

Executive summary

• Q3 FY25 saw strong operating performance, with adjusted EBITDA of $268 million and adjusted earnings of $22 million, despite a consolidated net loss of $163 million due to $173 million in non-cash goodwill impairment, primarily from the KCAD acquisition.

• Operating revenues rose to $1.04 billion, up 49% year-over-year, driven by the $2.0 billion KCA Deutag acquisition, which expanded international and offshore operations.

• Integration of KCAD is nearly 75% complete, with $50 million in cost synergies identified toward a $50–$75 million target.

• Debt repayment progress includes $120 million repaid through July, with $200 million targeted by year-end 2025.

• All eight unconventional FlexRigs in Saudi Arabia have commenced operations, supporting international expansion.

Financial highlights

• Q3 FY25 operating revenues were $1.04 billion, with direct margin of $266 million (North America), $34 million (International), and $23 million (Offshore).

• Adjusted EBITDA was $268 million; adjusted EPS was $0.22, while diluted EPS was $(1.64) due to goodwill impairment.

• Cash and short-term investments totaled $187 million, with an undrawn $950 million credit facility.

• Net loss attributable to shareholders was $162.8 million, compared to net income of $88.7 million in Q3 FY24.

• Operating cash flow for the nine months ended June 30, 2025, was $336 million.

Outlook and guidance

• Q4 direct margin guidance: $230–$250 million (North America), $22–$32 million (International), $22–$30 million (Offshore), with 138–144 rigs in North America and 62–66 internationally.

• Full-year 2025 capital expenditures forecast at $380–$395 million; depreciation at $595 million; cash taxes at $190–$220 million; interest expense for Q4 at $25 million.

• Backlog increased to $7.3 billion as of June 30, 2025, with 27.8% expected to be fulfilled by fiscal 2026.

• Management expects cost savings from acquisition synergies and restructuring to become evident in future quarters.

• 2026 CapEx expected to decrease, with spend front-loaded in 2025.