Oil States International, Inc. (OIS) Q1 2026 Earnings Call Transcript – Image for illustrative purposes only (Image credits: Unsplash)
Houston – Oil States International Inc. released its first-quarter 2026 earnings on Monday, revealing a return to profitability despite a notable revenue decline driven by geopolitical tensions and project delays.[1][2] The company, which specializes in offshore manufactured products and energy services, reported net income of $1.1 million as it prioritized cost controls and debt reduction. Executives highlighted a robust backlog in key segments even as Middle East uncertainties weighed on activity.
Financial Results Reflect Mixed Quarter
The firm posted consolidated revenues of $145.4 million for the period ended March 31, down 19 percent from the prior quarter’s $178.5 million and 9 percent lower than the year-ago $159.9 million.[1] Adjusted EBITDA came in at $16.7 million, a 27 percent sequential drop but 11 percent below last year’s first quarter.[1]
Net income stood at $1.1 million, or $0.02 per share, after $4.1 million in restructuring and asset impairment charges tied to exiting certain U.S. land operations. Excluding those items, adjusted net income reached $5.2 million, or $0.09 per share, aligning with analyst expectations while revenue missed forecasts by about 6 percent.[2] Operating cash flow registered a use of $1.9 million, largely from a $13.3 million rise in working capital.
| Key Metric | Q1 2026 | Q4 2025 | Q1 2025 |
|---|---|---|---|
| Revenues | $145.4M | $178.5M | $159.9M |
| Net Income | $1.1M | $(117.2)M | $3.2M |
| Adj. EBITDA | $16.7M | $22.8M | $18.7M |
| Adj. Net Income | $5.2M | $7.5M | $3.9M |
This table underscores the sequential pressures from lower activity, contrasted with year-over-year adjusted gains in core profitability.[1]
Offshore Segment Powers Performance
Offshore Manufactured Products led with $91.4 million in revenue, flat year over year but down 26 percent sequentially, generating $18.5 million in adjusted segment EBITDA at a 20 percent margin.[1] The segment’s backlog measured $430 million at quarter end, supported by $84 million in bookings for a 0.9x book-to-bill ratio. Offshore and international markets accounted for 72 percent of total revenues, up from 66 percent a year earlier.[2]
Completion and Production Services contributed $21.5 million in revenue and $6.1 million adjusted EBITDA, while Downhole Technologies added $32.4 million in sales but a slim $1.1 million in EBITDA amid regional conflicts delaying growth.[1] President and CEO Lloyd Hajdik noted during the earnings call that heightened Middle East tensions led to contract delays and cost increases, though the company maintained focus on higher-margin offshore work.
- Offshore Manufactured Products: Decade-high backlog levels signal sustained demand.
- Strategic shift: 74 percent of trailing 12-month revenues from offshore/international.
- U.S. land exposure: Reduced but positioned for potential uptick from private operators.
Balance Sheet Strengthened Through Debt Actions
Cash and equivalents totaled $59 million at quarter end, exceeding total debt by $4 million. The company amended its credit facility in January, securing $75 million in revolving capacity and a $50 million term loan, with $112.3 million available after letters of credit.[1] In early April, Oil States retired its remaining $52.7 million in convertible notes using cash, borrowings, and stock issuance.
- Geopolitical risks tempered Q1 but reinforced offshore focus.
- $430M backlog provides revenue visibility.
- Debt reduction enhances flexibility for investors and growth.
Hajdik emphasized this progress: “We strengthened our balance sheet by reducing debt in early April, which enhances our financial flexibility. With a strong liquidity position and a more resilient capital structure, we believe Oil States is well positioned to navigate ongoing near-term volatility.”[1]
Outlook Targets Growth Amid Uncertainty
Executives issued second-quarter guidance of $157 million to $162 million in revenues and $18 million to $20 million in adjusted EBITDA. Full-year ambitions include a book-to-bill ratio of 1.0x or better, with no changes to prior outlook despite risks.[2] Management anticipates benefits from energy security demands, LNG projects, and offshore expansions in regions like Latin America and West Africa.
Oil States also earned two technology awards from the SPE Offshore Technology Conference for innovations in geothermal wellheads and MPD tools, underscoring its engineering edge.[1] Shares fell sharply post-release, reflecting investor focus on the revenue miss, though the firm’s offshore positioning offers stakeholders a buffer against volatility.