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    HAL
    Earnings call· Jun 2026(Q2 FY26)

    HALLIBURTON CO HAL

    Jul 21, 2026 Source

    Executive summary

    Halliburton Q2 FY26 — Strong International Performance and North America Recovery

    Halliburton delivered strong Q2 FY26 results, driven by robust international performance and a recovering North America market. The company is strategically leveraging its technology and value proposition to secure significant contract wins globally, particularly in unconventionals and offshore, while maintaining capital discipline and focusing on returns. Management anticipates continued revenue growth and margin expansion, despite ongoing geopolitical fluidity in the Middle East.

    Highlights

    5

    • Total company revenue reached $5.7 billion, with an adjusted operating margin of 12%.

    • International revenue was $3.4 billion, marking a 6% year-over-year increase and the highest Q2 in over a decade.

    • Generated $824 million of cash flow from operations and $668 million of free cash flow.

    • Repurchased approximately $200 million of common stock during the quarter.

    • North America business showed sequential improvement, with D&E division growing 9% year-over-year.

    Concerns

    3

    • Middle East Asia revenue decreased 2% sequentially to $1.3 billion due to ongoing conflict disruptions.

    • Drilling and Evaluation operating income decreased 4% sequentially to $338 million, primarily due to the seasonal roll-off of software sales.

    • Lower specialty chemical activity in North America resulted from the sale of the Chemical business.

    Guidance & targets

    14
    CategoryTargetConfidence
    International business growth (ex-Middle East)
    low double digits
    high materiality
    High
    Corporate expenses
    $80 million
    medium materiality
    High
    SAPS expenses
    $45 million
    medium materiality
    High
    Net interest expense
    $88 million
    medium materiality
    High
    Other net expense
    $35 million
    medium materiality
    High
    Effective tax rate
    approximately 19%
    medium materiality
    High
    Capital expenditures
    about $1.1 billion
    high materiality
    High
    Completion and Production revenue
    flat to down 2%
    high materiality
    High
    Completion and Production margins
    improve 125 to 175 basis points
    high materiality
    High
    Drilling and Evaluation revenue
    down 3% to 5%
    high materiality
    High
    Drilling and Evaluation margins
    improve 25 to 75 basis points
    high materiality
    High
    D&E margin trend
    continues
    medium materiality
    Medium
    C&P margin trend
    same trend
    medium materiality
    Medium
    International growth engines annual revenue
    upside on $2.5 billion to $3 billion
    high materiality
    High

    Segment performance

    8
    SegmentRevenueYoYQoQMargin
    Total Company
    Total company revenue increased 6% sequentially, with an adjusted operating margin of 12%.
    		$5.7 billion—6%12% Adjusted Operating Margin
    International
    International revenue increased 6% year-over-year and 5% sequentially, marking the highest second quarter revenue in over a decade.
    		$3.4 billion6%5%—
    North America
    North America revenue was flat year-over-year but increased 7% sequentially, showing positive activity response.
    		$2.3 billionflat7%—
    Completion and Production
    Revenue increased 6% sequentially, driven by increased stimulation activity in the Western Hemisphere and improved well intervention services in Asia. Partially offset by lower specialty chemical activity (due to sale), decreased cementing in Latin America, and lower activity in the Middle East.
    		$3.2 billion—6%$474 million Operating Income (15% margin)
    Drilling and Evaluation
    Revenue increased 5% sequentially, primarily from increased drilling-related services and higher WiLAN activity in North America and Europe, Africa. Operating income decreased 4% sequentially due to the seasonal roll-off of software sales, lower software sales globally, decreased project management in Latin America, and lower wireline activity in the Middle East.
    		$2.5 billion9%5%$338 million Operating Income (13% margin)
    Europe Africa
    Revenue increased 19% sequentially, driven by improved activity across multiple product service lines in the North Sea, increased well construction in Namibia and Egypt, higher completion tool sales in the East Med, and increased project management in Angola.
    		$1.0 billion—19%—
    Middle East Asia
    Revenue decreased 2% sequentially, primarily due to lower activity across multiple product service lines in Kuwait, Iraq, and Qatar due to the conflict.
    		$1.3 billion—-2%—
    Latin America
    Revenue increased 3% sequentially, primarily driven by increased stimulation activity in Argentina and Mexico and improved completion tool sales in Mexico.
    		$1.1 billion—3%—

    Operational metrics

    10
    Adjusted net income per diluted share
    $0.55
    Q2 FY26

    Adjusted net income per diluted share for the second quarter.

    Reported net income per diluted share
    $0.64
    Q2 FY26

    Reported net income per diluted share for the second quarter.

    Corporate and other expense
    $83 million
    Q2 FY26

    Corporate and other expenses incurred in the second quarter.

    SAPS for migration expense
    $46 million
    Q2 FY26

    Expenses related to SAP migration included in Q2 results.

    Net interest expense
    $83 million
    Q2 FY26

    Net interest expense for the second quarter.

    Other net expense
    $31 million
    Q2 FY26

    Other net expense for the second quarter.

    Normalized effective tax rate
    18.3%
    Q2 FY26

    Normalized effective tax rate for the second quarter.

    Capital expenditure
    $235 million
    Q2 FY26

    Capital expenditures for the second quarter.

    Share repurchases
    $200 million
    Q2 FY26

    Amount of common stock repurchased during the second quarter.

    North America rig adds
    Over 30
    Q2 FY26

    Number of rigs added in North America, indicating increased activity.

    Industry KPIs

    7
    MetricValueDetails
    Rpo backlog—
    FCF CAPEX leverage$668 millionUSD
    M a integration progress—
    Digital recurring revenue—
    Orders bookings by segment—
    Segment adjusted EBITDA margin15%%
    Data center new energy revenue capacity—

    Orderbook & backlog

    4
    Integrated field management service awardFoundational projectQ2 FY26

    Expected to transform Halliburton's business in Iraq, putting latest digital and technology offerings to work at scale.

    Sonotrach unconventional awardMulti-well integrated drilling and completions programQ2 FY26

    First unconventional award for Sonotrach in Algeria, already delivered longest lateral drilled in country to date.

    ZEUS fleet deployment in ArgentinaMultibillion contractQ2 FY26

    First ZEUS fleet mobilized for a multiyear, multibillion contract with YPF, planned to start up in Q4 FY26.

    North Sea Stem vessel contractMultiyear contractQ2 FY26

    Commissioning phase began for newest North Sea Stem vessel, with first operations expected at year-end.

    Deals & partnerships

    5
    SonotrachFirst unconventional award, multi-well integrated drilling and completions program

    In Algeria, Halliburton secured Sonotrach's first unconventional award, a multi-well integrated drilling and completions program.

    YPFDeployment of first ZEUS fleet for unconventional operationsmultibillionmultiyear

    In Argentina, Halliburton's first ZEUS fleet has been mobilized and is planned to start up in the fourth quarter for a multiyear, multibillion contract with YPF.

    SikaAcquisition to enhance directional drilling capabilities

    Halliburton's recent acquisition of Sika is fully integrated with its Logix automation platform, enhancing its closed-loop drilling solution.

    InformatikAcquisition to enhance digital capabilities

    Halliburton announced the acquisition of Informatik in its press release.

    Total EnergiesSizable win in offshore

    Halliburton announced a sizable win with Total Energies in offshore.

    Capital programs

    2
    ZEUS fleet deployment in Argentinaunderway
    Start: Q4 FY26

    Benefit: Unconventional fracturing services for YPF

    Deployment for a multiyear, multibillion contract with YPF, with planned startup in Q4 FY26. This exemplifies Halliburton's unique capability to bring leading unconventional technology to international customers.

    North Sea Stem vessel deploymentunderway
    Start: Q4 FY26

    Benefit: Strengthening global STEM business, first offshore implementation of Octave automated pumping control system

    Commissioning phase began for the newest North Sea Stem vessel, with first operations of its multiyear contract expected at year-end. This deployment strengthens the global STEM business and represents the first offshore implementation of Octave.

    Risks & headwinds

    4
    Middle East conflict and geopolitical fluidityOngoing (Q2 and expected to continue impacting Q3)

    Middle East Asia revenue decreased 2% sequentially to $1.3 billion in Q2.

    Mitigation: Halliburton maintains operational footprint, wins foundational projects (e.g., Iraq IFMS), and is ready for recovery. Q3 guidance assumes steady activity, not recovery to pre-war levels.

    Seasonal roll-off of software salesQ2, with seasonal pickup expected in Q3.

    D&E operating income decreased 4% sequentially in Q2.

    Mitigation: Offset by higher-margin software sales in Q3.

    Higher maintenance costs and equipment mobilizationQ2, potentially ongoing with new contract wins.

    Impacted Q2 C&P margins.

    Mitigation: Part of optimizing asset deployment; new contract wins are expected to be margin accretive long-term.

    Delays in Gulf of Mexico activityQ2.

    Impacted Q2 C&P margins.

    Mitigation: Not explicitly stated, but Gulf of Mexico is structurally a high-margin business.

    What to watch in Q3 FY26

    5

    North America C&P margin improvement

    Q3 FY26
    Current15% (Q2 C&P operating margin)
    TargetImprovement of 125 to 175 basis points (Q3 guide)

    Why it matters

    Indicates the effectiveness of Halliburton's "maximized value" strategy and pricing power in a recovering North America market.

    In our Completion and Production division, we anticipate sequential revenue to be flat to down 2% and margins to improve 125 to 175 basis points.

    Q&A highlights

    6

    How has the North America completions market evolved regarding price and cost, and how does this feed into H2 margin outlook?

    Management confirmed positive margin trajectory due to white space filling and rig adds. They are seeing steady price increases across the entire fleet, not just individual jobs. The focus is on margin expansion, including potentially moving equipment overseas for better returns.

    “We are seeing price increases and it's a steady march. It's -- it doesn't all happen at once. We anecdotally we can describe price increases. But what our primary focus is across the entire fleet.”

    asked by Stephen Richardson · answered by Jeffrey Miller

    2 min read5 chapters

    Detailed Narrative

    01

    International Market Strength and Strategy

    Halliburton's international business recorded its highest Q2 revenue in over a decade, reaching $3.4 billion, up 6% year-over-year. The company is seeing strong customer engagement and growing demand across all regions, with durable long-cycle investments increasing in unconventional, offshore, and intervention markets. Halliburton's strategy focuses on technology differentiation, execution, and close customer collaboration, leading to significant contract awards and a robust opportunity pipeline.

    02

    North America Recovery and Maximized Value Strategy

    North America activity responded positively as expected, with revenue at $2.3 billion, flat year-over-year. The market is in recovery, showing stronger activity, modest pricing gains, and increased technology adoption. Halliburton's "maximized value" strategy prioritizes returns over market share, leveraging technology, automation, electrification, and real-time subsurface data to improve customer performance and recovery. The company is actively pushing for price increases across its fleet and is willing to redeploy equipment to international markets for higher margins.

    03

    Middle East Dynamics and Strategic Wins

    The Middle East region experienced disruptions due to ongoing conflict, leading to a 2% sequential decrease in revenue to $1.3 billion. Activity recovery is fluid and dependent on daily events. Despite this, Halliburton secured significant awards, including an integrated field management service award in Iraq, which is expected to transform its business in the country. The company also noted progress in unconventional fracturing operations in Jafura and integrated projects offshore, indicating a strong long-term future in the region.

    04

    Technology and Digital Differentiation

    Halliburton emphasizes its technological leadership, particularly in digital solutions and automation. The company's open-architecture software business, focused on AI, data management, and deep science, is attracting customers. Automation platforms like ZEUS IQ and Logix, enhanced by acquisitions such as Sika and Informatik, enable more precise well placement, better reservoir contact, and faster drilling times, proving to be key differentiators in winning contracts globally.

    05

    Unconventional Growth Globally

    International unconventionals are a key growth engine, with significant progress in multiple regions. Halliburton secured Sonotrach's first unconventional award in Algeria, involving a multi-well integrated drilling and completions program, and mobilized its first ZEUS fleet in Argentina, planned to start up in Q4. The company has frac spreads operating in Argentina, Algeria, Kuwait, Saudi, and UAE, leveraging its scale and technology to compete effectively in these growing markets.

    AI-generated summary of the company’s earnings call. Not investment advice.