Weatherford International (WFRD) Q4 2023 earnings summary

Executive summary

• Q4'23 revenue was $1.362B, up 4% QoQ and 13% YoY; adjusted EBITDA was $321M, up 5% QoQ and 21% YoY, with a 23.6% margin.

• FY'23 revenue rose 19% to $5.135B; adjusted EBITDA increased 45% to $1.186B, with a 23.1% margin, and net income was $417M.

Financial highlights

• Q4'23 net income was $140M, up 14% QoQ and 94% YoY; operating income was $216M, up 28% YoY.

• FY'23 operating income was $820M, up 99%; gross margin was 33.9%, up 361 bps, and GAAP basic EPS was $5.79.

• FY'23 adjusted free cash flow was $651M versus $299M in FY'22; operating cash flow was $832M versus $349M. Q4 adjusted free cash flow was $315M and operating cash flow was $375M.

• FY'23 capex was $209M, or 4.1% of revenue, versus $132M in FY'22; Q4 capex was $67M.

Outlook and guidance

• Q1'24 revenue expected to decline low-single digits QoQ on seasonality; DRE high-single-digit growth, WCC mid-single-digit decline and PRI high-single-digit decline expected.

• Q1'24 adjusted EBITDA margin expected to expand 25–50 bps vs. Q4'23 and improve more than 120 bps YoY; capex projected at $55–$70M, with positive adjusted free cash flow.

• FY'24 revenue expected to grow double digits to low teens, led by Middle East growth; DRE expected to grow high teens, WCC mid-single digits and PRI high-single digits.

• FY'24 adjusted EBITDA margin expected to progress meaningfully toward 25%; capex projected at ~5% of revenue and adjusted free cash flow above $500M.