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    HAL
    Earnings call· Dec 2025(Q4 FY25)

    HALLIBURTON CO HAL

    Jan 21, 2026 Source

    Executive summary

    Halliburton Q4 FY25 — Strong Execution and International Growth Amidst North America Rebalancing

    Halliburton delivered solid Q4 FY25 results, outperforming expectations with strong execution in both North America and international segments, despite a rebalancing market. The company is confident in its collaborative strategy and technology to drive future growth, particularly in international markets and emerging power opportunities, while prioritizing returns over market share in North America. Management expects 2026 to be a rebalancing year, setting the stage for sustained growth in subsequent years.

    Highlights

    5

    • Delivered total company revenue of $22.2 billion and adjusted operating margin of 14% for FY25.

    • Generated $2.9 billion of cash flow from operations and $1.9 billion of free cash flow for FY25.

    • Repurchased $1 billion of common stock in FY25, returning 85% of free cash flow to shareholders.

    • International revenue of $13.1 billion for FY25, outperforming a 7% decline in rig count.

    • Completion and Production division operating income increased 11% sequentially to $570 million in Q4 FY25.

    Concerns

    5

    • North America revenue declined 6% year-over-year to $9.1 billion for FY25.

    • Expects North America revenue to decline high single digits in FY26 compared to FY25.

    • Anticipates Q1 FY26 Completion and Production revenue to decrease 7% to 9% sequentially, with margins declining about 300 basis points.

    • Q1 FY26 Drilling and Evaluation revenue expected to decline 2% to 4% sequentially, with margins declining 25 to 75 basis points.

    • SAP S/4 migration project completion delayed to Q4 2026, with quarterly expenses of $40M-$45M throughout the year.

    Guidance & targets

    15
    CategoryTargetConfidence
    International revenue
    flat to up modestly
    high materiality
    Medium
    North America revenue
    decline high single digits
    high materiality
    Medium
    Capital expenditures
    about $1.1 billion
    high materiality
    High
    Corporate expenses
    increase about $5 million
    medium materiality
    High
    SAP expenses
    about $45 million
    medium materiality
    High
    SAP expenses run rate
    $40 million to $45 million
    medium materiality
    High
    SAP project completion
    Q4 of this year
    medium materiality
    High
    SAP project annual savings
    $100 million
    medium materiality
    High
    Net interest expense
    increase about $5 million
    medium materiality
    High
    Other net expense
    about $35 million
    medium materiality
    High
    Effective tax rate
    approximately 21%
    medium materiality
    High
    Completion and Production revenue
    decrease 7% to 9%
    high materiality
    High
    Completion and Production margins
    decline about 300 basis points
    high materiality
    High
    Drilling and Evaluation revenue
    decline 2% to 4%
    medium materiality
    High
    Drilling and Evaluation margins
    decline 25 to 75 basis points
    medium materiality
    High

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    International
    FY25 revenue outperformed a 7% decline in rig count. Strong growth of about 7% in remainder of international business excluding Saudi Arabia and Mexico.
    		$13.1 billiondown 2%increased 7%—
    North America
    Decline primarily driven by lower stimulation activity in U.S. land and Canada, decreased fluid services in Gulf of America, and lower well intervention services in U.S. land.
    		$9.1 billiondecrease of 6%7% decrease—
    Completion and Production
    Revenue improvements primarily driven by higher year-end completion tool sales globally, offset by lower stimulation activity in the Western Hemisphere. Operating income increased due to activity mix improvements from completion tool sales.
    		$3.3 billion—flatOperating income was $570 million, an increase of 11% when compared to Q3 2025, and the operating income margin was 17%.
    Drilling and Evaluation
    Revenue improvements driven by higher wireline activity in the Eastern Hemisphere and increased year-end software sales were offset by lower fluid services in North America. Operating income increased due to better activity mix from wireline business in the Eastern Hemisphere and year-end software sales.
    		$2.4 billion—flatOperating income was $367 million, an increase of 5% sequentially and operating income margin was 15%.
    Europe/Africa
    Primarily driven by higher completion tool sales in the North Sea and improved activity across multiple product service lines in Africa.
    		$928 million—increase of 12% sequentially—
    Middle East/Asia
    Primarily driven by increased well intervention services and higher stimulation activity in the Middle East and improved activity across multiple product service lines in Asia.
    		$1.5 billion—increase of 3% sequentially—
    Latin America
    Primarily driven by higher completion tool sales in Brazil and the Caribbean and higher software sales in Mexico.
    		$1.1 billion—7% increase sequentially—

    Operational metrics

    18
    Adjusted operating margin
    14%
    FY25

    We delivered total company revenue of $22.2 billion and adjusted operating margin of 14%.

    Adjusted operating margin
    15%
    Q4 2025

    Adjusted operating income was $829 million and adjusted operating margin was 15%.

    Share repurchases
    $1 billion
    FY25

    During the year, we repurchased $1 billion of our common stock.

    Share repurchases
    $250 million
    Q4 2025

    During Q4, we repurchased $250 million of our common stock.

    Shares repurchased
    42 million
    FY25

    For the full year, we repurchased approximately 42 million shares at an average price of $23.8 per share.

    Share count
    lowest levelsin 10 years
    FY25

    reducing our share count to its lowest levels in 10 years.

    Adjusted net income per diluted share
    $0.69
    Q4 2025

    Adjusted net income per diluted share was $0.69.

    Corporate and other expense
    $66 million
    Q4 2025

    In Q4, our corporate and other expense was $66 million.

    SAP S/4 migration spend
    $42 million
    Q4 2025

    In Q4, we spent $42 million on SAP S/4 migration.

    Net interest expense
    $86 million
    Q4 2025

    Net interest expense for the quarter was $86 million.

    Other net expense
    $25 million
    Q4 2025

    Other net expense in Q4 was $25 million.

    Normalized effective tax rate
    19.8%
    Q4 2025

    Our normalized effective tax rate for Q4 was 19.8%.

    Capital expenditures
    $337 million$100 million lower than expected
    Q4 2025

    Capital expenditures for Q4 were $337 million, which is $100 million lower than expected due to late equipment deliveries.

    International rig count decline
    7%
    FY25

    outperforming a 7% decline in rig count.

    North America rig count decline
    6%
    FY25

    despite a 6% decline in rig count.

    Artificial lift international revenue
    record
    Q4 2025

    artificial lift delivered record international quarterly revenue and is now active in 15 countries.

    ZEUS IQ, Sensori, auto frac customer adoption
    18%increased
    Q4 2025

    customer adoption of ZEUS IQ, Sensori and auto frac increased by 18%.

    Venezuela historical business size
    $0.5 billionpretty consistently
    decade ago

    A decade ago, it was probably a $0.5 billion business for us pretty consistently.

    Industry KPIs

    5
    MetricValueDetails
    FCF CAPEX leverage$1.9 billion FCF; $1.1 billion capexUSD
    M a integration progressMulti-Chem sale
    Orders bookings by segmentall-time high
    Segment adjusted EBITDA margin17% C&P; 15% D&E%
    Data center new energy revenue capacity400 megawattsMW

    Orderbook & backlog

    1
    Completion tool order bookall-time highQ4 2025

    Biased towards deepwater and offshore work.

    Deals & partnerships

    2
    VoltaGridStrategic collaboration for distributed power platform, particularly for international markets.

    Customers recognize that Halliburton's global footprint and reputation for execution are a strong complement to VoltaGrid's distributed power platform. The opportunity pipeline is expanding rapidly across the Eastern Hemisphere with several projects already in engineering review.

    nullSale of Multi-Chem business.

    We think the sale should be completed this quarter. The impact on the margin will be positive, but frankly, it will not be material overall.

    Capital programs

    2
    SAP S/4 migrationunderway
    Period spend: $40 million to $45 million
    Spent to date: $42 million

    Benefit: expected savings of about $100 million a year

    We anticipate the project to complete in Q4 of this year, which is a little later than we had earlier guided. We've also broadened the scope of the project to include some of the adjacent processes such as outsourcing our payroll and redesigning our overall OTC process. Expected savings of about $100 million a year after the project is completed.

    Modular power systems manufacturing capacitysecured

    Benefit: 400 megawatts

    During the quarter, Halliburton and VoltaGrid secured manufacturing capacity for 400 megawatts of modular power systems.

    Risks & headwinds

    5
    Commodity prices unlikely to rise near term absent geopolitical disruptions.Near term

    null

    Mitigation: Expect supply increases to moderate this year as demand continues to rise.

    Moderate softness in some key markets, particularly North America.2026

    North America revenue to decline high single digits compared to 2025.

    Mitigation: Prioritize returns over market share, stack uneconomic fleets, develop technology.

    International activity decline in specific regions (Saudi Arabia and Mexico).2025

    International revenue was $13.1 billion, down 2% year-over-year.

    Mitigation: Remainder of international business demonstrated strong growth of about 7%.

    Q1 2026 seasonal and mix headwinds for Completion and Production.Q1 2026

    C&P sequential revenue to decrease 7% to 9% and margins to decline about 300 basis points.

    Mitigation: Not structural as it relates to C&P, typical seasonality.

    SAP S/4 migration project completion delayed.Q4 2026

    a little later than we had earlier guided

    Mitigation: Broadened the scope of the project to include some of the adjacent processes.

    What to watch in Q1 FY26

    5

    Venezuela re-entry progress

    in months
    Currentearly steps are already well underway
    TargetResolution of commercial and legal terms, including payment certainty.

    Why it matters

    Re-entry into Venezuela could unlock a significant market opportunity (historically $0.5B business).

    I have always believed that oil and gas is the key to Venezuela's economic recovery. I'm excited about the tremendous opportunity for Halliburton in Venezuela... The early steps are already well underway.

    Q&A highlights

    6

    How quickly can Halliburton and its customers move into Venezuela, what conditions are needed, and what is the potential market size and scale-up speed?

    Halliburton can scale up fairly quickly, leveraging its existing footprint and equipment mobility. Early steps are underway, focusing on licenses and payment certainty. Historically, it was a $0.5 billion business, with optimism for long-term growth.

    “I think we could scale up fairly quickly. We're working through the mechanics around licenses and things that we're certain will get in place. But as far as returning to the country, we move equipment around all over the world. So we can move equipment quite quickly. We still have a footprint there in Venezuela in terms of operating bases and whatnot.”

    asked by Saurabh Pant · answered by Jeffrey Miller

    2 min read7 chapters

    Detailed Narrative

    01

    FY25 Performance Highlights

    Halliburton closed 2025 with strong performance, delivering $22.2 billion in total revenue and an adjusted operating margin of 14%. The company generated $2.9 billion in cash flow from operations and $1.9 billion in free cash flow, returning 85% of FCF to shareholders through $1 billion in stock repurchases, reducing the share count to its lowest in 10 years.

    02

    2026 Macro Outlook and Rebalancing

    Management expects 2026 to be a "rebalancing year" with abundant supply due to OPEC spare capacity and higher non-OPEC production. While commodity prices are unlikely to rise near-term, the company anticipates moderate softness in North America and stable international activity, setting the stage for sustained growth in 2027-2028 driven by steeper decline rates, diminishing reservoir quality, and limited exploration success.

    03

    International Business Strength and Growth Drivers

    The international business demonstrated resilience, with FY25 revenue of $13.1 billion (down 2% YoY) outperforming a 7% rig count decline. Key growth drivers include a collaborative value proposition, differentiated drilling and formation evaluation technology, and alignment with market evolution in unconventionals, development drilling, and intervention. Artificial lift delivered record international quarterly revenue and is active in 15 countries.

    04

    North America Strategy and Technology Adoption

    In North America, where FY25 revenue was $9.1 billion (down 6% YoY), Halliburton prioritizes returns over market share. This involves stacking uneconomic fleets and focusing on technology like ZEUS IQ for sand placement control and iCruise rotary steerable systems with LOGIX automation for long laterals, which saw an 18% increase in customer adoption. The company believes North America will be the first to recover when commodity outlook improves.

    05

    VoltaGrid Partnership and Power Opportunities

    The strategic collaboration with VoltaGrid is gaining momentum, particularly in the Eastern Hemisphere, with a rapidly expanding opportunity pipeline. Halliburton and VoltaGrid secured manufacturing capacity for 400 megawatts of modular power systems, indicating a significant avenue for future growth in addressing global power generation needs, especially for data centers.

    06

    Venezuela Re-entry Potential

    Halliburton is actively assessing re-entry into Venezuela, a market it exited in 2019 due to sanctions. Management believes it can scale up operations quickly once commercial and legal terms, including payment certainty, are resolved. Historically, Venezuela represented a $0.5 billion business for the company, and there is optimism for it to become a much larger market long-term.

    07

    Q1 2026 Segment Outlook

    For Q1 2026, the Completion and Production division is expected to see a sequential revenue decrease of 7% to 9% and margins decline by about 300 basis points, primarily due to a higher-than-normal roll-off of year-end completion tool sales and typical international seasonality. The Drilling and Evaluation division anticipates a sequential revenue decline of 2% to 4% and margins to decline 25 to 75 basis points.

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