Helmerich & Payne, Inc.

What they do

H&P provides performance-driven drilling solutions to oil and gas exploration and production companies, operating through three segments: North America Solutions, International Solutions, and Offshore Solutions. North America Solutions operates primarily in Texas and other U.S. states, International Solutions operates in the Middle East and Latin America, and Offshore Solutions provides asset-light management contracts and platform rigs in various international waters. The 'Other' segment includes BENTEC manufacturing and engineering operations, real estate, and captive insurance.

Revenue drivers

• North America Solutions (NAS) — The largest segment, generating $241 million in direct margin in Q3 FY26, with 223 rigs. Growth driven by deployment of 10 additional rigs and rising daily margins from private operators.
• International Solutions — Includes KCA Deutag land operations, with 137 rigs. Reported ~$31 million in direct margin in Q3 FY26 despite an operating loss. Growth supported by reactivations in Saudi Arabia and expansion in Argentina's Vaca Muerta.
• Offshore Solutions — Asset-light management contracts and platform rigs, generating $29 million in direct margin and $17 million operating income in Q3 FY26. Backlog strengthened to $3.6 billion including firm and optional periods.
• BENTEC (manufacturing) — Manufacturing and engineering operations serving the energy industry, included in 'Other' segment. Not separately detailed in recent earnings.

Recent performance

In Q3 FY26 (ended June 30, 2026), H&P reported consolidated revenue of $1.035 billion, up from $986.9 million in the prior quarter. Net income attributable to H&P was $76 million, or $0.74 per share, including a $115 million gain from the sale of Utica Square. Adjusted losses were $(10) million, or $(0.11) per share. Adjusted EBITDA was $236 million. For fiscal year 2025, revenue was $3.68 billion with a net loss of $163.7 million, reflecting the KCA Deutag acquisition and related integration costs.

Strategy

Management aims to increase efficiency, reduce costs, simplify the portfolio, and streamline support functions through company-wide initiatives. They plan to balance debt reduction, maintain the base dividend, and invest with discipline. Key growth areas include reactivating rigs in Saudi Arabia, expanding in Argentina's Vaca Muerta, and leveraging the BENTEC brand. The company emphasizes technology adoption, particularly FlexRig technology, to drive organic margin expansion.

Risks

• Integration and acquisition risk — The company may fail to successfully integrate KCA Deutag's operations in the expected timeframe, impacting financial results.
• Oil and gas price volatility — Downturns in oil and natural gas prices could reduce customer capital expenditures and drilling activity, causing rig idling or stacking.
• Geopolitical instability in Middle East — Operations in the Middle East, including Saudi Arabia, are exposed to conflicts and disruptions that could affect safety, continuity, and asset utilization.
• Contract cancellations or terminations — Customers may cancel, suspend, or renegotiate contracts due to economic conditions or performance issues, reducing revenue and cash flow.

Outlook

Management notes that near-term market conditions are fluid, particularly in the Middle East, but underlying trends are improving. Customer activity remains constructive, supporting demand for high-performance drilling solutions as the industry looks toward 2027. North America Solutions expects continued strong utilization and margins, while International Solutions is building momentum in Argentina and the Middle East. The company plans to accelerate deleveraging through efficiency initiatives and strong free cash flow.