Weatherford International

All figures are USD M, GAAP unless "adjusted" (company non-GAAP) or "analyst-computed". Sources: FY2022, FY2023 and FY2025 earnings releases (each containing the prior year) and the Q2 2026 release.

Income statement

FY2021 and FY2022 EBITDA figures are as reported by the company. FY2023–FY2025 EBITDA is analyst-computed on the same basis.

Gross profit is not shown.

Margins and growth (analyst-computed from reported figures)

FY2021 revenue growth uses FY2020 revenue of USD 3,685M (third-party historical data). The effective tax rate is tax provision divided by pre-tax income.

Revenue CAGR FY2021–FY2025: 7.8% (analyst-computed: USD 3,645M to USD 4,918M over four years). The FY2021–FY2024 CAGR, to the cyclical peak, was 14.8%.

Quarterly trajectory

Q1 2025 adjusted free cash flow is derived as the H1 2025 total (USD 145M) minus Q2 2025 (USD 79M). Q2 2025 net income includes a USD 70M gain on the Argentina sale.

Balance sheet

Total assets: Only partially verified. The sum of segment plus corporate assets disclosed in the 10-Q was USD 5,159M at 31 Dec 2024 and USD 5,272M at 30 Sep 2025.

Goodwill: Not separately reported in the earnings releases. Intangibles, net (mainly technology and trade names from fresh-start accounting and acquisitions) declined from USD 657M to USD 285M through amortisation.

Latest balance sheet (30 Jun 2026): Cash USD 1,100M; restricted cash USD 37M; total debt USD 1,480M; net debt USD 343M; equity USD 1,789M; net leverage 0.34x on TTM adjusted EBITDA of USD 1,016M.

Cash flow

H1 2026: OCF USD 311M; capex USD 96M; adjusted FCF USD 224M; dividends USD 40M; buybacks USD 26M.

Ratios (analyst-computed unless noted)

Notes on the ratio table:

• ROIC uses a notional 25% tax rate and year-end invested capital.

• Net debt/EBITDA for FY2022–FY2025 matches company disclosures (1.4x, 0.48x, 0.42x).

• FY2024 asset turnover is about 1.07x and ROA about 9.8% on derived year-end assets of USD 5,159M.

Full cash conversion cycle: DIO and DPO require cost of sales.

Commentary on trends, inflections and drivers

Turnaround phase (FY2021–FY2023). Revenue grew about 19% in both FY2022 and FY2023, driven by international recovery. International revenue rose 26% in FY2023, led by Latin America (+31%) and MENA/Asia (+30%), notably Mexico, Saudi Arabia and Oman. Operating leverage was exceptional: adjusted EBITDA margin rose 740 bps from 15.7% to 23.1% in two years. This came from pricing recovery, the end of loss-making contracts, a USD 22M FY2022 restructuring, and D&A falling from USD 440M to USD 327M as fresh-start asset values amortised. Net interest fell from USD 260M to USD 123M as the company repaid about USD 600M of gross debt and retired high-coupon exit notes. Net income swung from a USD 450M loss to USD 417M profit.

Peak (FY2024). Revenue reached a record USD 5,513M (+7%). Adjusted EBITDA margin hit 25.1%, achieving the long-stated 25% goal. MENA/Asia grew 17% to USD 2,123M, now the largest region. The company initiated dividends and buybacks.

Downturn (FY2025). Revenue fell 10.8%. Two causes dominate:

• Latin America collapsed 36% (USD -495M), mainly because Mexican revenue more than halved as Pemex cut activity and payments slowed.

• The Argentina pressure pumping business was sold in April 2025.

Adjusted EBITDA fell 23% with 337 bps of margin compression. DRE took the brunt (margin -523 bps). Despite this, adjusted free cash flow of USD 466M (43.7% conversion) was preserved through tight capex (USD 226M) and strong Q4 collections from Mexico. GAAP net income fell only 15% because of the USD 70M Argentina gain and lower taxes.

2026: geopolitical shock. The Iran conflict, which began in February 2026, disrupted Middle East activity and raised freight and logistics costs. H1 2026 profit impact was within the USD 30–50M range management had outlined, and management expects the full-year impact to be larger after later flare-ups. Q2 2026 net income of USD 39M was depressed by USD 25M of other charges (redomestication and M&A costs), USD 9M of restructuring, and a USD 33M tax charge. Cash generation, by contrast, was the best second quarter on record in this data set (adjusted FCF USD 139M, 62% conversion), driven by Mexico collections and working-capital release.

Balance sheet inflection. Total debt fell from USD 2,428M to USD 1,480M (-39%) between FY2021 and Q2 2026. Net debt fell from USD 1,315M to USD 343M (-74%). The October 2025 refinancing swapped about USD 1.3bn of 8.625% notes for USD 1.2bn of 6.75% notes. On those balances, annual cash interest falls by roughly USD 30M (analyst-computed: about USD 112M at 8.625% versus USD 81M at 6.75%), visible in Q2 2026 net interest of USD 16M versus USD 21M a year earlier. Equity has more than tripled since FY2021, to USD 1,789M at Q2 2026.

Management guidance (Jul 2026)

FY2026: revenue USD 4.54–4.80bn (midpoint about -5% year over year); adjusted EBITDA USD 951M–1.046bn (midpoint about USD 999M, about 21.4% margin); adjusted FCF conversion in the mid-to-high 40% range, implying about USD 450–480M of adjusted FCF (analyst-computed at the midpoint); effective tax rate low-to-mid 20%.

Q3 2026: revenue USD 1.105–1.155bn; adjusted EBITDA USD 235–265M; adjusted FCF above USD 100M.

Implied H2 2026 ramp: H1 adjusted EBITDA was USD 456M, so the full-year midpoint implies about USD 543M in H2, up about 19% half on half. This is the "significant ramp up in margin contribution" management described.

2027: activity expected to grow year over year, plus about USD 35–45M of structural benefits (NCS synergies of at least USD 15M; redomestication savings of USD 20–30M).

Consensus growth expectations

Sell-side commentary (UBS, June 2026) points to improving 2027 prospects.

Bull case

1. Cash machine at a mid-single-digit EV/EBITDA. About USD 465M of FY2026 adjusted FCF on a USD 6.8bn market cap implies about a 7% FCF yield, with a 0.34x levered balance sheet. Refinancing has permanently lowered interest costs, and redomestication adds USD 20–30M of cash savings from 2027.

2. Cyclical earnings trough in 2026 with clear catalysts. These include Middle East normalisation (Q2 2026 MENA was USD 78M below the prior year), the deepwater MPD and completions backlog (Noble, Valaris, Chevron, ExxonMobil), Venezuela, and NCS synergies. A return towards the FY2024 margin of 25% on USD 5bn+ of revenue would imply adjusted EBITDA above USD 1.25bn.

3. Re-rating from structural simplification. A Delaware parent may broaden the investor base and index eligibility and make stock a more effective M&A currency.

Bear case

1. Geopolitical concentration. 43% of revenue comes from MENA/Asia, and the Iran conflict's impact is escalating beyond the initial USD 30–50M estimate. Add about 7% Russia exposure, and Weatherford carries outsized tail risk versus diversified peers.

2. Top-line erosion and earnings quality. Revenue has declined for six consecutive year-over-year quarters through Q2 2026. Q2 2026 GAAP net income fell 71% year over year. The Aramco LSTK and PDO contract roll-offs create H2 revenue holes. Strong FCF has been flattered by lumpy Mexico collections.

3. Scale and competitive pressure. SLB/ChampionX and Baker Hughes/Chart consolidation, plus R&D of only about USD 120M a year, could erode niche leadership over time, particularly in artificial lift and digital.

Key catalysts and monitorables (next 12 months)

Analyst verdict

Weatherford in late 2026 is a fundamentally repaired company navigating an externally imposed soft patch, not a structurally impaired one. The post-bankruptcy transformation is complete and documented in the numbers:

• Net debt down 74% since 2021, to USD 343M.

• Interest coverage up from 0.45x to above 8x.

• Adjusted EBITDA margins sustained above 20% through a year in which revenue fell 11% and the company's second-largest market, Mexico, more than halved.

• A first full year of shareholder returns (USD 173M) followed in 2026 by a dividend increase despite guidance cuts. Few oilfield services companies of this size could make that combination look credible.

The near-term picture is clouded by geography. With 43% of revenue in MENA/Asia and about 7% in Russia, Weatherford's exposure to the Iran conflict and to sanctions risk is structurally higher than that of its larger peers. Management has already cut FY2026 guidance twice. Q2 2026 GAAP earnings were weak, and the expected H2 margin ramp, about 19% higher adjusted EBITDA half on half, carries execution and geopolitical risk. Investors should treat the FY2026 midpoint (about USD 1.0bn adjusted EBITDA) as plausible but not conservative.

Against that, the valuation is undemanding: about 7x TTM EV/adjusted EBITDA and a roughly 7% prospective FCF yield. Several self-help levers are independent of the cycle: USD 20–30M of redomestication savings, at least USD 15M of NCS synergies, and lower interest after the 2025 refinancing. The contract book is skewed towards long-cycle deepwater and NOC work that should underpin 2027.

Verdict: a constructive, cash-yield-led investment case with elevated geopolitical beta. The risk-reward favours accumulation on Middle East-driven weakness, contingent on Q3 2026 delivering within guidance and the Delaware scheme receiving court sanction. The key downside trigger to monitor is a further guidance reduction combined with deteriorating Mexico collections, which would undermine the cash thesis that currently anchors the equity story.