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    Earnings call· Jun 2026(Q3 FY26)

    Helmerich & Payne Q3 FY26 earnings call HP

    Aug 6, 2026 Source

    Executive summary

    Helmerich & Payne Q3 FY26 — Strong Performance Driven by North America and International Growth

    Helmerich & Payne delivered a strong third fiscal quarter, exceeding guidance across all segments, primarily driven by robust activity in North America and growing opportunities in Latin America. The company is focused on enterprise optimization initiatives to accelerate debt repayment and streamline operations, aiming for a 1x net debt-to-EBITDA target. Despite ongoing Middle East volatility, management is optimistic about a multi-year upstream growth cycle, leveraging its super-spec fleet and technology.

    Highlights

    5

    • Adjusted EBITDA of $236 million comfortably exceeded guidance midpoint.

    • North America Solutions averaged 142 rigs and delivered $241 million in direct margins, with margins per day up over $1,000 sequentially to $18,700.

    • International Solutions direct margin of $31 million aligned with the high end of guidance, driven by strong performance in Latin America.

    • Offshore segment delivered $29 million in direct margin, above the high end of guidance, supported by performance-related bonuses.

    • Successfully reactivated 10 rigs in North America and 5 rigs in Saudi Arabia since March, demonstrating efficient capacity deployment.

    Concerns

    4

    • Adjusted EPS recorded a loss of $0.11 per share, excluding the gain from the Utica Square sale and other select items.

    • Middle East conflict continues to create disruption, causing delays in rig reactivations in Saudi Arabia and requiring monitoring of geopolitical tensions.

    • Capital expenditures for Q3 were $70 million, below anticipated levels due to reordering and delayed rig reactivations, indicating timing shifts.

    • Increased cash tax outlook to $150 million - $180 million for the full year, reflecting the Utica Square sale and stronger financial performance.

    Guidance & targets

    14
    CategoryTargetConfidence
    North America Solutions Direct Margin
    $245 million and $255 million
    high materiality
    High
    North America Solutions Average Rig Count
    145 and 151 rigs
    high materiality
    High
    North America Solutions Full-Year Average Rig Count
    140 to 144 rigs
    high materiality
    High
    International Solutions Average Rig Count
    60 to 70 rigs
    medium materiality
    High
    International Solutions Direct Margin
    $25 million and $45 million
    medium materiality
    Medium
    International Solutions Quarterly Direct Margin Run Rate
    at least $45 million
    medium materiality
    High
    Offshore Solutions Direct Margin
    $26 million and $30 million
    medium materiality
    High
    Offshore Solutions Full-Year Direct Margin
    $113 million to $117 million
    medium materiality
    High
    Full-Year Capital Expenditures
    $270 million to $310 million
    high materiality
    High
    Full-Year Cash Tax Payments
    $150 million to $180 million
    medium materiality
    High
    Annualized Corporate Cost Reduction
    $40 million
    medium materiality
    High
    Asset Sales Proceeds
    over $160 million
    medium materiality
    High
    Vaca Muerta FlexRigs Operating
    15 FlexRigs
    medium materiality
    High
    Flex Robotics Rigs Deployed
    5 robotic rigs
    low materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    North America Solutions
    Exceeded high end of guidance range for direct margin. Strong pricing and performance-related bonuses contributed to margin growth. Operating cost per day improved despite recommissioning costs.
    Average Rigs: 142Direct Margin per Day: $18,700Sequential Margin per Day Growth: over $1,000Rigs Reactivated: 10Rigs Exited Quarter: 147
    		———$241 million
    International Solutions
    Came in at the high end of guidance range. Led by strong performance in Latin America, particularly Vaca Muerta. Lower impact from Middle East conflict than expected due to easing logistical challenges.
    Saudi Rigs Operating: 22Saudi Rigs Reactivated: 5Bahrain Suspended Rigs Resumed: 2Vaca Muerta Rigs Operating: 9
    		———$31 million
    Offshore Solutions
    Came in ahead of the high end of guidance range. Driven by achievement of several performance-related bonuses. Provides consistent and stable results with minimal capital requirements.
    Active Rigs: 3Management Contracts: 30
    		———$29 million

    Operational metrics

    21
    Adjusted EBITDA
    $236 million
    Q3 FY26

    Comfortably ahead of the implied midpoint of guidance.

    Net Profit per Diluted Share
    $0.74
    Q3 FY26

    Reported net profit.

    Adjusted EPS
    -$0.11
    Q3 FY26

    Loss per share, excluding specific items.

    Gross Capital Expenditures
    $70 millionbelow anticipated spending levels
    Q3 FY26

    Attributable to timing shifts rather than scope changes.

    Net Debt to EBITDA Target
    1x
    Long-term

    Top priority for balance sheet focus, aiming to accelerate debt repayment.

    Term Loan Repayment
    $400 millionahead of schedule
    Prior period

    Paid off ahead of schedule as part of debt reduction efforts.

    Bond Retirement Target
    $350 million
    by end of 2027

    Focused on retiring this bond as part of accelerating debt repayment.

    Annual Dividend Spending
    $100 million
    Annual

    Core element of shareholder return strategy, maintained during deleveraging phase.

    Annual Maintenance CapEx
    $250 million
    Annual

    Minimum capital needed to keep rigs running, confident in maintaining this level.

    Annual Sustaining CapEx
    $50 million
    Annual

    Planned investment for fleet enhancements.

    Super-Spec Fleet Utilization
    95%
    Current

    Indicates a tight market for super-spec rigs.

    Remaining Reactivatable Rigs
    around 10
    Current

    Rigs that can be quickly returned to service, also potentially for Argentina or other international markets.

    Vaca Muerta Market Share
    25%
    Current

    H&P is one of the region's leading drilling contractors with 9 rigs operating.

    Vaca Muerta Production Growth
    more than 50%
    2026-2030

    Forecasted growth supported by significant investment.

    Well Completion Time Reduction
    13% fasterthan operator's previous record
    Recent project

    Demonstrates operational excellence and value translation.

    Manual Slides
    0
    Recent deployment

    Successful deployment creating opportunities for broader adoption of automation.

    Rigs Operating
    22
    Q3 FY26

    Includes 5 reactivated rigs, with the 5th beginning drilling early Q4.

    FlexRigs Operating
    8
    Q3 FY26

    Running in the unconventional Jafurah basin.

    Geothermal Rigs
    6
    Current

    Includes three recently signed agreements for additional rigs.

    Geothermal Rigs
    below double-digit mark, targeting double-digits
    Current

    Combined U.S. and Europe geothermal projects, with a goal to reach double-digit count.

    Flex Robotics Rigs Operating
    2
    Current

    Second package now operating, demonstrating effectiveness of automation strategy.

    Industry KPIs

    2
    MetricValueDetails
    FCF CAPEX leverageFCF: $98 million; Capex: $70 million; Net Debt/EBITDA: targeting 1xUSD; USD; ratio
    Segment adjusted EBITDA marginNorth America Solutions: $18,700 per dayUSD per day

    Deals & partnerships

    3
    an operatorFour-year contract renewal for an offshore rig.multimillion dollarfour-year

    Secured a multimillion dollar four-year contract renewal with an operator in Norway.

    multiple customers impliedContracts for three additional rigs to be exported from the United States to Argentina.

    Securing multiyear contracts for remaining idle FlexRigs in Argentina and for an additional three rigs to be exported from the U.S.

    implied customer in Beetaloo BasinAward for a third rig to be exported from the U.S. for development activity.

    Pleased to announce the award for a third rig, which will be exporting from the U.S. as development activity continues to build in the Beetaloo Basin.

    Risks & headwinds

    3
    Ongoing Middle East conflict and geopolitical tensionsOngoing, impacting Q4 FY26 and potentially into 2027.

    Visibility remains somewhat limited; Q4 International Solutions direct margin guidance range of $25 million to $45 million reflects potential outcomes.

    Mitigation: Closely monitoring developments, maintaining continuity of operations, navigating supply chain constraints, engaging with customers and partners, focusing on economic viability of current assets.

    Highly volatile commodity pricing environmentPast three months, ongoing.

    Prices retreated to pre-conflict levels before rebounding; 12-month strip around $70 per barrel WTI.

    Mitigation: Confidence in higher planning price assumptions for 2027 budgets, strong customer demand for super-spec rigs persists.

    Delays in rig reactivations in Saudi ArabiaQ3 FY26, impacting Q4 FY26.

    Reactivations at a slower pace than planned; 5 of 7 reactivated rigs now drilling, 2 remaining.

    Mitigation: Broader portfolio performing as expected, confident in achieving annual rig guidance midpoint, focus on achieving $45 million quarterly direct margin run rate for International Solutions.

    What to watch in Q4 FY26

    5

    International Solutions Direct Margin Run Rate

    Future Quarters
    Current$31 million (Q3 FY26)
    Targetat least $45 million quarterly

    Why it matters

    Achieving this target is crucial for the segment's profitability and overall company performance, especially with growth in Argentina offsetting Middle East volatility.

    We remain on course to get the quarterly direct margin run rate to at least $45 million with strong growth in Argentina, offsetting some of the near-term conflict-related activity changes in the Middle East.

    Q&A highlights

    6

    Seeking details on the drivers behind the Q4 guidance and the sustainability of current trends into the next fiscal year for NAS, International, and Offshore.

    Management highlighted sequential improvement in Q4 driven by activity growth across all segments. NAS is seeing continued rig count growth, International is benefiting from Latin America and Middle East reactivations, and Offshore provides stability. They expressed confidence in Q4 and constructive customer conversations for FY27, expecting continued improvement from the Q4 base.

    “We actually think we'll be improving from this base into '27, but it's a good place to kind of start thinking about where EBITDA levels are going to be next year.”

    asked by Derek Podhaiser · answered by Todd Scruggs

    2 min read6 chapters

    Detailed Narrative

    01

    Q3 Performance Highlights

    Helmerich & Payne delivered strong financial and operational results in Q3 FY26, with adjusted EBITDA of $236 million exceeding guidance. All operating segments surpassed the midpoint of their direct margin guidance, demonstrating resilience despite Middle East disruption and market volatility🌐. The company also generated strong free cash flow of $98 million.

    02

    North America Solutions Momentum

    The North America Solutions segment experienced a significant rebound, averaging 142 rigs and achieving $241 million in direct margins. Margins per day increased by over $1,000 sequentially to $18,700, reflecting strong pricing and performance-related bonuses. The company efficiently reactivated 10 rigs during the quarter and exited with 147 rigs running in the Lower 48, with capacity to reactivate up to 160 rigs.

    03

    International Growth and Middle East Navigation

    International Solutions delivered $31 million in direct margins, driven by strong performance in Latin America, particularly the Vaca Muerta. In the Middle East, operations remained stable with 22 rigs operating in Saudi Arabia, despite delays in reactivations. The company resumed operations on two suspended rigs in Bahrain and is monitoring the region for future growth opportunities in 2027.

    04

    Vaca Muerta Expansion

    The Vaca Muerta basin in Argentina is a key growth area, with H&P currently operating 9 rigs and planning to expand to 15 FlexRigs by Q3 FY27, including exporting three from the U.S. The region is seeing increased investment and production growth, with H&P's super-spec rigs and technology delivering record-setting well performance and healthy margins on long-duration contracts.

    05

    Enterprise Optimization and Financial Framework

    The company is implementing enterprise optimization initiatives to accelerate debt repayment, streamline operations, and reduce corporate costs by an annualized $40 million by the end of 2027. CFO Todd Scruggs outlined a financial framework focused on achieving a 1x net debt-to-EBITDA target, maintaining a $100 million annual dividend, and disciplined capital investment of $250 million for maintenance and $50 million for sustaining CapEx.

    06

    Geothermal and Flex Robotics

    H&P is expanding its presence in geothermal drilling, having signed agreements for three additional rigs in the U.S., bringing the total to 6 in the U.S. and several in Europe, with a target to reach double-digit geothermal rigs. The company is also advancing its Flex Robotics technology, with a second package now operating in the Permian and a target of five robotic rigs deployed by February.

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