Weatherford International (WFRD) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $1.409 billion, up 7% year-over-year, with net income of $157 million and basic EPS of $2.14, up 26% year-over-year.

• Adjusted EBITDA was $355 million (25.2% margin), up 16% year-over-year; adjusted free cash flow was $184 million, converting at 51.7%.

• Net leverage improved to 0.5x, the lowest in over 15 years, supported by $1 billion in gross debt reduction over three years.

• Fourteen consecutive quarters of year-over-year international revenue growth, led by Middle East, North Africa, and Asia.

• Shareholder returns totaled $68 million in Q3 2024, including $18 million in dividends and $50 million in share repurchases; board authorized a $0.25/share quarterly dividend and a $500 million share repurchase program.

Financial highlights

• Operating cash flow was $262 million, with adjusted free cash flow of $184 million and capex at $78 million (5.5% of revenue).

• Gross margin was 34.9%, up 34 bps year-over-year; adjusted EBITDA margin rose 197 bps year-over-year to 25.2%.

• Net working capital as a percentage of LTM revenue improved by over 260 basis points year-over-year to 25.8%.

• ROIC reached 28.3% and ROA was 10.6% for the trailing twelve months.

• Cash and cash equivalents at September 30, 2024: $920 million.

Outlook and guidance

• Q4 2024 and FY 2024 consolidated revenues expected to be flat to up low single digits versus Q3 2024.

• Adjusted EBITDA margin for Q4 2024 and FY 2024 expected to be around 25%; adjusted free cash flow projected above $500 million.

• Anticipates continued growth in select international land and offshore markets, especially Middle East, Sub-Saharan Africa, and Asia.

• Capex for FY 2024 anticipated to remain in line with Q3 2024 levels.

• Management remains constructive on the mid- to long-term outlook, anticipating multi-year energy demand expansion.