Q2 2026 Oil States International Inc Earnings Call Transcript
Key Points
- Oil States International Inc (OIS) achieved a book-to-bill ratio of 1.2 times in Q2 2026, with backlog increasing to $451 million, the highest level in over a decade.
- The company reported sequential revenue growth of 8% and adjusted EBITDA growth of 14%, driven by strong performance in downhole technologies and completion and production services segments.
- Offshore manufactured products segment delivered strong EBITDA margins above 19%, with production platform and connector products providing positive uplift.
- Downhole technology segment saw revenue at its highest level since Q2 2023, with volumes for shaped charges and short guns doubling quarter-over-quarter.
- The company maintains a strong balance sheet with ample liquidity, having retired its convertible senior notes and repurchased $5 million of common stock during the quarter.
- Management expects full-year free cash flow of $35 million to $40 million, with potential additional proceeds from asset sales.
- Geopolitical disruptions in the Middle East continue to cause contract award delays, impacting near-term revenue conversion in project-driven businesses.
- Input costs for shaped charges remain elevated, particularly for tungsten, explosive powder, and copper, pressuring margins in the downhole technology segment.
- Certain drilling, connector, and production facility product orders have been delayed, pushing some revenue recognition from 2026 into 2027.
- Working capital investments, primarily in inventory for long-lead materials and rising raw material costs, led to negative operating cash flow of $6 million in Q2.
- The company's third-quarter guidance implies a sequential decline in revenue and adjusted EBITDA, reflecting ongoing timing uncertainties.
- Full-year 2026 guidance was not raised despite strong backlog, indicating management's caution about near-term market volatility.
Hello, everyone.
Thank you for joining us and welcome to the Oil States 2Q26 earnings call.
(Operator Instructions)
Thank you, Trevor. Good morning and welcome to Oil state's second quarter 2026 earnings conference call. Our call today will be led by our President and CEO, Lloyd Hodgick, and Matt Ottenreith, Oil state's Executive Vice President and Chief Financial Officer. Before we begin, we would like to caution listeners regarding forward-looking statements. To the extent that our remarks today contain information other than historical information. Please note that we are relying on the safe harbor protections afforded by federal law.
No one should assume that these forward-looking statements remain valid later in the quarter or beyond. Any such remarks should be weighed in the context of the many factors that affect our business, including those risks disclosed in our 2025 Form 10-K and Form 10-KA, along with other recent SEC
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