Oil States International, Inc. Q2 2026 Earnings Call Summary

Moby Intelligence

Thu, July 30, 2026 at 8:07 PM PDT 3 min read

Strategic Performance Attribution and Market Dynamics

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• Achieved a 1.2x book-to-bill ratio and a decade-high backlog of $451 million, driven by a strategic shift where offshore and international activity now represents over 70% of consolidated revenue.

• Attributed sequential revenue and EBITDA growth to high-grading the technology portfolio and disciplined execution within the Completion and Production Services and Downhole Technologies segments.

• Noted that while Middle East geopolitical conflict has caused near-term contract award delays, the fundamental demand for secure, diversified energy supply continues to support long-cycle deepwater investment.

• Reported material improvement in Downhole Technologies due to stronger perforating and completion product sales, despite persistent headwinds from raw material cost increases and charge powder availability.

• Emphasized that national oil companies are increasingly prioritizing deepwater resources as a more secure alternative to regions currently experiencing supply disruptions.

• Highlighted that U.S. land activity rose modestly as operators maintained capital discipline, focusing on operational efficiency rather than aggressive production increases.

Operational Outlook and Guidance Assumptions

• Anticipated that delayed drilling, connector, and production facility orders will be received in the second half of 2026, pushing some revenue recognition into 2027.

• Projected full-year 2026 revenue between $640 million and $660 million, with adjusted EBITDA ranging from $77 million to $83 million based on current award timelines.

• Expected a book-to-bill ratio of 1x or greater for the full year, supported by strong bidding visibility and the conversion of firm backlog.

• Assumed that multi-year military product contracts will weight the 12-month backlog conversion rate to approximately 55%, compared to the historical 65-70% range.

• Forecasted that the deepwater upcycle will accelerate between 2027 and 2030, supported by lower break-even costs and long-life reserves compared to land resource plays.

Financial Position and Risk Factors

• Retired the remaining $53 million of convertible senior notes on April 1, significantly strengthening the balance sheet and reducing debt to $18 million.

• Identified elevated input costs for tungsten, explosive powder, and copper as a primary margin pressure for the Downhole Technologies segment.

• Invested $27 million in working capital during the first half of 2026 to secure long-lead materials for military awards and manage rising raw material costs.

• Targeted $19 million in remaining assets held for sale to further bolster liquidity and support opportunistic share repurchases.