Q3 2025 Halliburton Co Earnings Call

October 21, 2025

Good morning, and thank you for standing by at this time I would like to welcome everyone to the Halliburton Company's third quarter 2035 earnings conference call. All lines have been placed on mute to prevent any background noise and after the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone.

Jeff Miller: Before we dive into the geographic results, let me talk about the bigger picture for oil and gas. We share the well accepted view that oil and gas demand will continue to grow over the long term. We also know there is a tremendous amount of investment required to maintain production at current levels, let alone to sustainably grow production. Recent estimates are that 90% of upstream spending simply offsets natural declines, underscoring the requirement for ongoing oil and gas investment. Near term operators are navigating volatile commodity prices as OPEC spare capacity returns and trade concerns persist. The impact is most apparent in North America where we expect customers to maintain the cautious posture they adopted in the second quarter. In international markets, activity remains broadly steady from here as we look forward to 2026. In this environment, we took steps to address the near term conditions.

Before we dive into the geographic results, let me talk about the bigger picture for oil and gas. We share the well accepted view that oil and gas demand will continue to grow over the long term. We also know there is a tremendous amount of investment required to maintain production at current levels, let alone to sustainably grow production. Recent estimates are that 90% of upstream spending simply offsets natural declines, underscoring the requirement for ongoing oil and gas investment. Near term operators are navigating volatile commodity prices as OPEC spare capacity returns and trade concerns persist. The impact is most apparent in North America where we expect customers to maintain the cautious posture they adopted in the second quarter. In international markets, activity remains broadly steady from here as we look forward to 2026. In this environment, we took steps to address the near term conditions.

You bet, if all your question simply Brad well again.

I would now like to turn the conference over to David Goldman Senior Director of Investor Relations. Please go ahead.

Hello, and thank you for joining the Halliburton third quarter 2025 conference call. We will make the recording of today's webcast available for seven days on Halliburton's website. After this call.

Joining me today are Jeff Miller, Chairman, President and CEO, and Eric array Executive Vice President and CFO.

Some of today's comments may include forward looking statements that reflect halliburton's views about future events.

These matters involve risks and uncertainties that could cause our actual results to materially differ from our forward looking statements.

These risks are discussed in halliburton's Form 10-K for the year ended December 31 2024.

Form 10-Q for the quarter ended June 32025.

Recent current reports on form 8-K, and other Securities and Exchange Commission filings.

We undertake no obligation to revise or update publicly any forward looking statements for any reason.

Jeff Miller: First, we improved our cost structure by rightsizing our operations and overhead, which we expect will reduce quarterly labor costs by roughly $100 million beginning in Q4. Second, we reset our capital expenditures target for next year and as a result, I expect capital spending in 2026 to decline by almost 30% to around $1 billion. Third, we are actively managing our deployed capital and we will continue to idle, relocate, or retire equipment that does not meet our return thresholds. Finally, and most importantly, we took these steps while maintaining a strong focus on our technology development, our growth engines, and our value proposition. I am super confident in the Halliburton team. Our ability to execute and the strength of our competitive position. Near-term conditions will not change our focus on delivering value for our customers and leading financial performance for our shareholders.

First, we improved our cost structure by rightsizing our operations and overhead, which we expect will reduce quarterly labor costs by roughly $100 million beginning in Q4. Second, we reset our capital expenditures target for next year and as a result, I expect capital spending in 2026 to decline by almost 30% to around $1 billion. Third, we are actively managing our deployed capital and we will continue to idle, relocate, or retire equipment that does not meet our return thresholds. Finally, and most importantly, we took these steps while maintaining a strong focus on our technology development, our growth engines, and our value proposition. I am super confident in the Halliburton team. Our ability to execute and the strength of our competitive position. Near-term conditions will not change our focus on delivering value for our customers and leading financial performance for our shareholders.

Our comments today also include non-GAAP financial measures.

Additional details and reconciliation to the most directly comparable GAAP financial measures are included in our third quarter earnings release and in our quarterly results and presentation section of our website now I'll turn the call over to Jeff.

Thank you David and good morning, everyone.

I am pleased with Halliburton's third quarter performance I will begin todays discussion with our highlights from this quarter.

We delivered total company revenue of $5 6 billion and adjusted operating margin of 13%.

International revenue was $3 2 billion, a decrease of 2% year over year.

North America revenue was $2 4 billion flat year over year.

During the third quarter, we generated $488 million of cash flow from operations $276 million of free cash flow and repurchased approximately $250 million of arc.

Stock.

Jeff Miller: Now let's turn to our geographic results. I'll start with the international markets where Halliburton delivered quarterly revenue of $3.2 billion, roughly flat to the second quarter. For the fourth quarter, we expect international revenue to increase 3% to 4% on roughly flat activity levels with typical seasonal software and completion tool sales. Let me share some progress on our international growth engines. Those businesses where we expect growth outperformance by Halliburton relative to the oilfield services market. These growth engines, production services, artificial lift, unconventionals, and drilling are central to our international strategy. We made solid progress this quarter, and here are a few updates. In production services, we won a major five-year contract from ConocoPhillips in the North Sea.

Now let's turn to our geographic results. I'll start with the international markets where Halliburton delivered quarterly revenue of $3.2 billion, roughly flat to the second quarter. For the fourth quarter, we expect international revenue to increase 3% to 4% on roughly flat activity levels with typical seasonal software and completion tool sales. Let me share some progress on our international growth engines. Those businesses where we expect growth outperformance by Halliburton relative to the oilfield services market. These growth engines, production services, artificial lift, unconventionals, and drilling are central to our international strategy. We made solid progress this quarter, and here are a few updates. In production services, we won a major five-year contract from ConocoPhillips in the North Sea.

And finally, we took cost reduction actions that we expect will save approximately $100 million per quarter going forward.

Okay.

Before we dive into the geographic results, let me talk about the bigger picture for oil and gas.

We share the well accepted view that oil and gas demand will continue to grow over the long term.

We also know there is a tremendous amount of investment required to maintain production at current levels, let alone to sustainably grow production.

Recent estimates are that 90% of upstream spending simply offset natural declines.

Underscoring the requirement for ongoing oil and gas investment.

Near term operators are navigating volatile commodity prices as OPEC, plus spare capacity returns and trade concerns persist.

The impact is most apparent in North America, where we expect customers to maintain the cautious posture they adopted in the second quarter.

Jeff Miller: To deliver this contract, we will transform a conventional offshore service vessel into an advanced stimulation platform complete with the first deployment of Octave Automation to an offshore environment. This demonstrates our leading technology and execution that maximizes asset value for our customers. In artificial lift, Kuwait Oil Company named Halliburton Service Partner of the Year and awarded Halliburton a multi-year ESP contract which further strengthens our position in Kuwait. Additionally, in Colombia, Ecopetrol awarded Halliburton ESP contracts in nine of 11 fields. In international unconventionals, we saw further adoption of our leading completions technology and set a new continuous pumping record in the Vaca Muerta. I'm encouraged by our technology penetration in this market as we deliver leading performance and maximize asset value. Finally, in drilling, we introduced iCruise Force in the UAE and Qatar with strong results in both markets.

To deliver this contract, we will transform a conventional offshore service vessel into an advanced stimulation platform complete with the first deployment of Octave Automation to an offshore environment. This demonstrates our leading technology and execution that maximizes asset value for our customers. In artificial lift, Kuwait Oil Company named Halliburton Service Partner of the Year and awarded Halliburton a multi-year ESP contract which further strengthens our position in Kuwait. Additionally, in Colombia, Ecopetrol awarded Halliburton ESP contracts in nine of 11 fields. In international unconventionals, we saw further adoption of our leading completions technology and set a new continuous pumping record in the Vaca Muerta. I'm encouraged by our technology penetration in this market as we deliver leading performance and maximize asset value. Finally, in drilling, we introduced iCruise Force in the UAE and Qatar with strong results in both markets.

In international markets activity remains broadly steady from here as we look forward to 2026.

In this environment, we took steps to address the near term conditions.

First we improved our cost structure by right sizing, our operations and overhead, which we expect will reduce quarterly labor costs by roughly $100 million.

Beginning in the fourth quarter.

Second we reset our capital expenditures target for next year and as a result, I expect capital spending in 2026 to decline by almost 30% to around $1 billion.

Third we are actively managing our deployed capital and we will continue to idle relocate or retire equipment that does not meet our return thresholds.

Finally, and most importantly, we took these steps while maintaining a strong focus on our technology development, our growth engines and <unk>.

Our value proposition.

I am Super confident and the Halliburton team, our ability to execute and the strength of our competitive position.

Jeff Miller: iCruise Force maximizes rate of penetration while utilizing advanced formation evaluation tools, delivering significant value where logging requirements and rig costs are high. Beyond our growth engines, I am pleased with the performance of our international business. Our value proposition to collaborate and engineer solutions to maximize asset value for our customers continues to win work and deliver results. We see this most clearly in Deepwater. During the quarter, I met with customers in Latin America and Europe to recognize the performance we've achieved through our collaborative model. Together we are reducing drilling times, improving well placement, and deepening our collective competitive advantage. The strength of our value proposition and the breadth of our technology offerings underpins my confidence in our offshore position where we have leading technologies in formation, evaluation, drilling, automation, drilling fluids, cementing, well completions, and intervention.

iCruise Force maximizes rate of penetration while utilizing advanced formation evaluation tools, delivering significant value where logging requirements and rig costs are high. Beyond our growth engines, I am pleased with the performance of our international business. Our value proposition to collaborate and engineer solutions to maximize asset value for our customers continues to win work and deliver results. We see this most clearly in Deepwater. During the quarter, I met with customers in Latin America and Europe to recognize the performance we've achieved through our collaborative model. Together we are reducing drilling times, improving well placement, and deepening our collective competitive advantage. The strength of our value proposition and the breadth of our technology offerings underpins my confidence in our offshore position where we have leading technologies in formation, evaluation, drilling, automation, drilling fluids, cementing, well completions, and intervention.

Near term conditions will not change our focus on delivering value for our customers and leading financial performance for our shareholders.

Now, let's turn to our geographic results.

I'll start with the international markets, where Halliburton delivered quarterly revenue of $3 $2 billion roughly flat to the second quarter.

For the fourth quarter, we expect international revenue to increase 3% to 4% on roughly flat activity levels with typical seasonal software and completion tool sales.

Let me share some progress on our international growth engines, those businesses, where we expect growth outperformance by Halliburton relative to the oilfield services market.

These growth engines production services artificial lift unconventional and drilling are central to our international strategy. We made solid progress this quarter and here are a few updates.

And production services, we won a major five year contract from Conocophillips in the North Sea.

Jeff Miller: Offshore is roughly half our revenue outside of North America land today, and I expect that share to grow. To conclude my thoughts on the international market, our value proposition is winning with customers. We are demonstrating differentiated performance both on and offshore, and our growth engines are delivering. I am confident in the future of our international business. Now let's turn to North America. Our Q3 revenue of $2.4 billion was above our expectations with 5% sequential growth driven by less than anticipated completions, white space, and strong activity in the Gulf of Mexico. During the quarter we executed our strategy to maximize value in North America. We stacked on economic frac fleets, expanded our leading automation offerings, and executed cost out initiatives to reduce our operating costs and overhead.

Offshore is roughly half our revenue outside of North America land today, and I expect that share to grow. To conclude my thoughts on the international market, our value proposition is winning with customers. We are demonstrating differentiated performance both on and offshore, and our growth engines are delivering. I am confident in the future of our international business. Now let's turn to North America. Our Q3 revenue of $2.4 billion was above our expectations with 5% sequential growth driven by less than anticipated completions, white space, and strong activity in the Gulf of Mexico. During the quarter we executed our strategy to maximize value in North America. We stacked on economic frac fleets, expanded our leading automation offerings, and executed cost out initiatives to reduce our operating costs and overhead.

To deliver this contract we will transform a conventional offshore service vessel into an advanced stimulation platform.

<unk> with the first deployment of okta automation to an offshore environment.

This demonstrates our leading technology and execution that maximize asset value for our customers.

And artificial lift.

Oil company named Halliburton service partner of the year and awarded Halliburton, a multi year ESP contract, which further strengthens our position in Kuwait.

Additionally, in Colombia Echo patrol awarded Halliburton, ESB contracts and nine of 11 fields.

And international lung Conventionals, we saw further adoption of our leading completions technology and set a new continuous pumping record in novato Marta.

I am encouraged by our technology penetration in this market as we deliver leading performance and maximize asset value.

Jeff Miller: Looking to the fourth quarter, we expect greater than typical white space and seasonal activity slowdowns to result in approximately 12% to 13% lower sequential revenue. Despite softer activity in the near term, technology demand remains strong across both divisions as our customers are focused on maximizing the value of their capital dollars in completions. ZEUS is the recognized leader in technology and performance. Year to date we have introduced two additional ZEUS Electric fleets under contract and today over half of our active North America fleet is ZEUS, an important milestone. We also see strong demand for our ZEUS IQ closed-loop fracturing offering. We expect meaningful growth of this service in 2025 and 2026, deepening our competitive advantage and reinforcing our leadership in fracturing technology efficiency and execution.

Looking to the fourth quarter, we expect greater than typical white space and seasonal activity slowdowns to result in approximately 12% to 13% lower sequential revenue. Despite softer activity in the near term, technology demand remains strong across both divisions as our customers are focused on maximizing the value of their capital dollars in completions. ZEUS is the recognized leader in technology and performance. Year to date we have introduced two additional ZEUS Electric fleets under contract and today over half of our active North America fleet is ZEUS, an important milestone. We also see strong demand for our ZEUS IQ closed-loop fracturing offering. We expect meaningful growth of this service in 2025 and 2026, deepening our competitive advantage and reinforcing our leadership in fracturing technology efficiency and execution.

And finally in drilling we introduced I cruise force in the UAE and Qatar with strong results in both markets I.

Hi, cruise force maximizes rate of penetration, while utilizing advanced formation evaluation tools delivering significant value for logging requirements and rig costs are high.

Beyond our growth engines I am pleased with the performance of our international business, our value proposition to collaborate and engineer solutions to maximize asset value for our customers continues to win work and deliver results.

We see this most clearly in deepwater during.

During the quarter I met with customers in Latin America, and Europe to recognize the performance we've achieved through our collaborative model.

Together, we are reducing drilling times, and proving well placement and deepening our collective competitive advantage.

The strength of our value proposition and the breadth of our technology offerings underpins my confidence in our offshore position, where we have leading technologies and formation evaluation drilling automation drilling fluids, cementing well completions and intervention.

Jeff Miller: In drilling services, we delivered solid sequential and year-on-year growth driven by iCruise. In the third quarter, we introduced the 7 7/8 iCruise CX, a highly sought-after hole size for the Permian Basin with outstanding results. The system completes curve and lateral sections in a single run, replicating the proven success we have achieved in other hole sizes. This new offering broadens the iCruise product portfolio, and given the system's consistent performance and our advances in telemetry, automation, and rig integration, I am confident we will see rapid adoption by our customers and continued growth in our North America Drilling Services business. To close, North America is a tough market today. We are taking steps and executing our strategy to maximize value. This means we are prioritizing returns, technology, leadership, and working with leading operators. I am confident that our strategy execution will drive further success.

In drilling services, we delivered solid sequential and year-on-year growth driven by iCruise. In the third quarter, we introduced the 7 7/8 iCruise CX, a highly sought-after hole size for the Permian Basin with outstanding results. The system completes curve and lateral sections in a single run, replicating the proven success we have achieved in other hole sizes. This new offering broadens the iCruise product portfolio, and given the system's consistent performance and our advances in telemetry, automation, and rig integration, I am confident we will see rapid adoption by our customers and continued growth in our North America Drilling Services business. To close, North America is a tough market today. We are taking steps and executing our strategy to maximize value. This means we are prioritizing returns, technology, leadership, and working with leading operators. I am confident that our strategy execution will drive further success.

Offshore is roughly half our revenue outside of North America land today, and I expect that share to grow.

To conclude my thoughts on the international market our value proposition is winning with customers. We are demonstrating differentiated performance, both on and offshore and our growth engines are delivering.

I am confident in the future of our international business.

Now, let's turn to North America.

Our third quarter revenue of $2 4 billion was above our expectations with 5% sequential growth driven by less than anticipated completions white space and strong activity in the Gulf of America.

During the quarter, we executed our strategy to maximize value in North America.

Stacked on economic Frac fleets expanded our leading automation offerings and executed cost out initiatives to reduce our operating costs and overhead.

Jeff Miller: Now let me address our investment in VoltaGrid. As disclosed in our Form 8-K filed on 14 October, Halliburton owns approximately 20% of VoltaGrid on a fully diluted basis. We invested early and increased our ownership over time because distributed power is a critical enabler for electrified oilfield services and a growing opportunity set beyond the oil field. Last week VoltaGrid announced an agreement to deploy 2.3 gigawatts of generation capacity to support Oracle's next generation artificial intelligence data centers. This expands VoltaGrid's contracted backlog, broadens its revenue base, extends a line of sight to multi-year growth, and validates VoltaGrid's position as a leading provider of long-term behind meter power solutions. I am also pleased to announce that we have signed an agreement with VoltaGrid to be their international partner for delivering distributed power solutions for data centers outside of North America.

Now let me address our investment in VoltaGrid. As disclosed in our Form 8-K filed on 14 October, Halliburton owns approximately 20% of VoltaGrid on a fully diluted basis. We invested early and increased our ownership over time because distributed power is a critical enabler for electrified oilfield services and a growing opportunity set beyond the oil field. Last week VoltaGrid announced an agreement to deploy 2.3 gigawatts of generation capacity to support Oracle's next generation artificial intelligence data centers. This expands VoltaGrid's contracted backlog, broadens its revenue base, extends a line of sight to multi-year growth, and validates VoltaGrid's position as a leading provider of long-term behind meter power solutions. I am also pleased to announce that we have signed an agreement with VoltaGrid to be their international partner for delivering distributed power solutions for data centers outside of North America.

Looking to the fourth quarter, we expect greater than typical white space and seasonal activity slowdowns to result in approximately 12% to 13% lower sequential revenue.

Despite softer activity in the near term technology demand remained strong across both divisions as our customers are focused on maximizing the value of their capital dollars.

And completions Zeus is the recognized leader in technology and performance year to date, we have introduced two additional Zeus electric fleets under contract and today over half of our active North America fleet is Zeus and important milestone.

We also see strong demand for our Zeus IQ closed loop fracturing offering.

We expect meaningful growth of this service in 2025, and 2026 deepening our competitive advantage and reinforcing our leadership in fracturing technology efficiency and execution.

Jeff Miller: Through this agreement we will combine Halliburton's global reach, design, manufacturing, and operating capabilities with VoltaGrid's distributed power expertise to deliver reliable power at scale. I expect this will be an important long-term growth opportunity for both VoltaGrid and Halliburton. Looking ahead, I'm excited by the opportunities for Halliburton and VoltaGrid. Before I turn the call over to Eric, let me close with this. Oil price volatility is likely to impact the near-term macro environment. While I firmly believe a recovery in activity is inevitable, the timing and shape remain uncertain. Near-term we will execute our collaborative strategy and advance our technology, invest in our international growth engines, maintain cost and capital discipline including idling equipment when returns are not economic, and finally remain focused on returning cash to shareholders. I'm excited about Halliburton. Our strategy, our team, our customer relationships, and our technology.

Through this agreement we will combine Halliburton's global reach, design, manufacturing, and operating capabilities with VoltaGrid's distributed power expertise to deliver reliable power at scale. I expect this will be an important long-term growth opportunity for both VoltaGrid and Halliburton. Looking ahead, I'm excited by the opportunities for Halliburton and VoltaGrid. Before I turn the call over to Eric, let me close with this. Oil price volatility is likely to impact the near-term macro environment. While I firmly believe a recovery in activity is inevitable, the timing and shape remain uncertain. Near-term we will execute our collaborative strategy and advance our technology, invest in our international growth engines, maintain cost and capital discipline including idling equipment when returns are not economic, and finally remain focused on returning cash to shareholders. I'm excited about Halliburton. Our strategy, our team, our customer relationships, and our technology.

And drilling services, we delivered solid sequential and year on year growth driven by I crews.

In the third quarter, we introduced the 707 eights I cruise CX.

Highly sought after hole size for the Permian basin with outstanding results.

The system completes curve and lateral sections in a single run replicating the proven success, we've achieved in other hole sizes.

This new offering broadens the eye cruise product portfolio and given the systems consistent performance and our advances and telemetry automation and rig integration I am confident we will see rapid adoption by our customers and continued growth in our North America drilling services business.

To close.

North America is a tough market today.

We are taking steps and executing our strategy to maximize value. This means we are prioritizing returns technology leadership and working with leading operators I am.

I'm confident that our strategy execution will drive further success.

Jeff Miller: Our portfolio is highly differentiated. We lead in critical product lines both on and offshore. Our value proposition is validated by the work we are doing today and the customer discussions we are having about future work. And finally, our leadership team is focused on executing the strategies that deliver strong financial performance. With that, I'll turn the call over to Eric.

Our portfolio is highly differentiated. We lead in critical product lines both on and offshore. Our value proposition is validated by the work we are doing today and the customer discussions we are having about future work. And finally, our leadership team is focused on executing the strategies that deliver strong financial performance. With that, I'll turn the call over to Eric.

Now, let me address our investment in both the grid.

As disclosed in our form 8-K filed on October 14th.

<unk> owns approximately 20% of Volta grid on a fully diluted basis.

We invested early and increased our ownership over time, because distributed power is a critical enabler for electrified oilfield services and a growing opportunity set beyond the oilfield.

Our comments today also include non-GAAP financial measures additional details and reconciliation to the most directly comparable GAAP financial measures are included in our third quarter earnings release and in our quarterly results and presentation section of our website now I'll turn the call over to Jeff.

Thank you David and good morning, everyone.

Eric Carre: Thank you, Jeff, and good morning. Our Q3 reported net income per diluted share was $0.02. Adjusted net income per diluted share was $0.58. Let me start with some color on the charges taken this quarter. All the details are available in the press release, but a few items are worth highlighting. First, to address near-term market conditions, we took steps to reset our cost structure. As a result, we recorded severance, fixed, and other assets write-offs of $284 million. We expect cash operational savings from the actions we took to result in approximately $100 million in quarterly savings. Second, because of the changes to US tax laws, we recorded an additional valuation allowance expense of $125 million. As a result of these changes, we also expect a lower effective tax rate on our US taxable income going forward.

Last week <unk>.

<unk> announced an agreement to deploy two three gigawatts of generation capacity to support Oracle's next generation artificial intelligence data centers.

This expands voltage grids contracted backlog broadens its revenue base extends a line of sight to multi year growth and validates voltage grids position as a leading provider of long term behind meter power solutions.

I am also pleased to announce that we have signed an agreement with both the grid to be their international partner for delivering distributed power solutions for data centers outside of North America.

Through this agreement, we will combine halliburton's global reach design manufacturing and operating capabilities with Volta grids distributed power expertise to deliver reliable power at scale.

I expect this will be an important long term growth opportunity for both voltage grid and halliburton.

Looking ahead I am excited by the opportunities for Halliburton and voltage grid.

Eric Carre: Now turning to operations, total company revenue for Q3 2025 was $5.6 billion, an increase of 2% when compared to Q2 2025. Adjusted operating income was $748 million, and adjusted operating margin was 13%. Our Q3 cash flow from operations was $488 million, and free cash flow was $276 million. During Q3, we repurchased approximately $250 million of our common stock. Now turning to the segment results. Beginning with our completion and production division, revenue in Q3 was $3.2 billion, an increase of 2% when compared to Q2 2025. Operating income was $514 million, flat when compared to Q2 2025, and operating income margin was 16%. Increased completion tool sales and higher artificial lift activity in North America were partially offset by lower completion tool sales internationally and decreased well intervention services in the Middle East.

Now turning to operations, total company revenue for Q3 2025 was $5.6 billion, an increase of 2% when compared to Q2 2025. Adjusted operating income was $748 million, and adjusted operating margin was 13%. Our Q3 cash flow from operations was $488 million, and free cash flow was $276 million. During Q3, we repurchased approximately $250 million of our common stock. Now turning to the segment results. Beginning with our completion and production division, revenue in Q3 was $3.2 billion, an increase of 2% when compared to Q2 2025. Operating income was $514 million, flat when compared to Q2 2025, and operating income margin was 16%. Increased completion tool sales and higher artificial lift activity in North America were partially offset by lower completion tool sales internationally and decreased well intervention services in the Middle East.

Before I turn the call over to Eric Let me close with this.

Oil price volatility is likely to impact the near term macro environment, while I firmly believe a recovery in activity is inevitable the timing and shape remain uncertain near term, we will execute our collaborative strategy and advance our technology invest.

We invest in our international growth engines.

Maintained cost and capital discipline, including idling equipment when returns are not economic and finally, we remain focused on returning cash to shareholders.

I am excited about Halliburton, our strategy, our team our customer relationships and our technology.

Our portfolio is highly differentiated.

We lead in critical product lines, both on and offshore.

Our value proposition is validated by the work we are doing today and the customer discussions we are having about future work.

And finally, our leadership team is focused on executing the strategies that deliver strong financial performance.

That I will turn the call over to Eric.

Thank you, Jeff and good morning, our Q3 reported net income per diluted share was <unk>.

Eric Carre: In our Drilling and Evaluation Division, revenue in Q3 was $2.4 billion, an increase of 2% when compared to Q2 2025. Operating income was $348 million, an increase of 12% sequentially, and operating income margin was 15%. These results were primarily driven by higher project management and improved wireline activity in Latin America, increased drilling services in North America and Europe Africa, and higher software sales in Europe Africa. Partially offsetting these increases were lower activity across multiple product service lines in the Middle East. Now let's move on to geographic results. Our Q3 international revenue was flat when compared to Q2 2025. Europe Africa revenue in Q3 was $828 million, flat. Sequentially, improved completion tool sales in Norway and increased drilling related services in Namibia were offset by lower completion tool sales in the Caspian area and lower fluid services across Europe, Middle East, Asia.

In our Drilling and Evaluation Division, revenue in Q3 was $2.4 billion, an increase of 2% when compared to Q2 2025. Operating income was $348 million, an increase of 12% sequentially, and operating income margin was 15%. These results were primarily driven by higher project management and improved wireline activity in Latin America, increased drilling services in North America and Europe Africa, and higher software sales in Europe Africa. Partially offsetting these increases were lower activity across multiple product service lines in the Middle East. Now let's move on to geographic results. Our Q3 international revenue was flat when compared to Q2 2025. Europe Africa revenue in Q3 was $828 million, flat. Sequentially, improved completion tool sales in Norway and increased drilling related services in Namibia were offset by lower completion tool sales in the Caspian area and lower fluid services across Europe, Middle East, Asia.

Adjusted net income per diluted share was <unk> 58.

Let me start with some color on the charges taken this quarter.

All the details are available in the press release, but a few items are worth highlighting.

First to address near term market conditions, we took steps to reset our cost structure.

As a result, we recorded severance and fixed and other assets write offs of $284 million, we expect cash operational savings from the actions. We took to result in approximately $100 million in quarterly savings.

Second because of the changes to U S tax flows we recorded an additional valuation allowance expense of a $125 million as a result of these changes. We also expect a lower effective tax rate on our U S taxable income going forward.

Now turning to operations.

Total company revenue for Q3, 2025 was $5 6 billion, an increase of 2% when compared to Q2 2025.

Adjusted operating income was $748 million and adjusted operating margin was 13%.

Eric Carre: Revenue in Q3 was $1.4 billion, a decrease of 3% sequentially, primarily driven by lower activity across multiple product service lines. In Saudi Arabia, Latin America, revenue in Q3 was $996 million, a 2% increase sequentially. This increase was primarily driven by higher project management activity across the region and increased drilling services in Argentina. In North America, Q3 revenue was $2.4 billion, a 5% increase sequentially. This increase was primarily driven by improved stimulation activity in US land and Canada, and higher completion tool sales and increased wireline activity in the Gulf of Mexico. Moving on to other items in Q3, our corporate and other expense was $64 million. We expect our Q4 corporate expenses to increase about $5 million. In Q3, we spent $50 million on SAP S4 migration, which included milestone payments and is included in our results.

Revenue in Q3 was $1.4 billion, a decrease of 3% sequentially, primarily driven by lower activity across multiple product service lines. In Saudi Arabia, Latin America, revenue in Q3 was $996 million, a 2% increase sequentially. This increase was primarily driven by higher project management activity across the region and increased drilling services in Argentina. In North America, Q3 revenue was $2.4 billion, a 5% increase sequentially. This increase was primarily driven by improved stimulation activity in US land and Canada, and higher completion tool sales and increased wireline activity in the Gulf of Mexico. Moving on to other items in Q3, our corporate and other expense was $64 million. We expect our Q4 corporate expenses to increase about $5 million. In Q3, we spent $50 million on SAP S4 migration, which included milestone payments and is included in our results.

Our Q3 cash flow from operations was $488 million and free cash flow was $276 million.

During Q3, we repurchased approximately $250 million of our common stock.

Now turning to the segment results.

Beginning with our completion and production Division revenue in Q3 was $3 $2 billion, an increase of 2% when compared to Q2 2025.

Operating income was $514 million flat when compared to Q2 2025, and the operating income margin was 16% increased.

Increased completion tool sales and higher artificial lift activity in North America were partially offset by lower completion tool sales internationally and decreased well intervention services in the middle East.

In our drilling and evaluation Division revenue in Q3 was $2 4 billion, an increase of 2% when compared to Q2 2025.

Operating income was $348 million, an increase of 12% sequentially and operating income margin was 15%.

Eric Carre: For Q4, we expect SAP expenses to be about $40 million. Net interest expense for the quarter was $88 million. For Q4, we expect net interest expense to increase about $5 million. Other net expense in Q3 was $49 million, which included $23 million due to the impairment of an investment in Argentina and a mark-to-market gain on a derivative. We expect Q4 expense to be about $45 million. Our normalized effective tax rate for Q3 was 21.5%. Based on our anticipated geographic earnings mix, we expect our Q4 effective tax rate to be approximately flat. Capital expenditures for Q3 were $261 million for the full year 2025. We expect capital expenditures to be about 6% of revenue. In Q3 tariffs impacted our business by $31 million. For Q4, we currently expect a gross impact of about $60 million, increasing quarter on quarter due to Section 232 tariffs.

For Q4, we expect SAP expenses to be about $40 million. Net interest expense for the quarter was $88 million. For Q4, we expect net interest expense to increase about $5 million. Other net expense in Q3 was $49 million, which included $23 million due to the impairment of an investment in Argentina and a mark-to-market gain on a derivative. We expect Q4 expense to be about $45 million. Our normalized effective tax rate for Q3 was 21.5%. Based on our anticipated geographic earnings mix, we expect our Q4 effective tax rate to be approximately flat. Capital expenditures for Q3 were $261 million for the full year 2025. We expect capital expenditures to be about 6% of revenue. In Q3 tariffs impacted our business by $31 million. For Q4, we currently expect a gross impact of about $60 million, increasing quarter on quarter due to Section 232 tariffs.

These results were primarily driven by higher project management and improved wireline activity in Latin America increased drilling services in North America, and Europe Africa, and higher software sales in Europe Africa.

Partially offsetting these increases were lower activity across multiple product service lines in the middle East.

Now, let's move on to geographic results.

Our Q3 international revenue was flat when compared to Q2 2025.

Europe Africa revenue in Q3 was $828 million flat sequentially.

Improved completion tool sales in Norway.

And increased drilling related services in Namibia.

Were offset by lower completion tool sales in the Caspian area and lower fluid services across Europe.

Middle East Asia revenue in Q3 was $1 4 billion, a decrease of 3% sequentially, primarily driven by lower activity across multiple product service lines in Saudi Arabia.

Eric Carre: These impacts are included in our guidance. Now let me provide you with comments on our Q4 expectations. In our completion and production division, we expect greater than typical white space and seasonality in North America, partially offset by strong international results in the fourth quarter. As a result, in our completion and production division, we anticipate sequential revenue to decrease 4% to 6% and margins to be down 25 to 75 basis points. In our drilling and evaluation division, we expect sequential revenue to be flat to down 2% and margins to increase 50 to 100 basis points. I will now turn the call back to Jeff.

These impacts are included in our guidance. Now let me provide you with comments on our Q4 expectations. In our completion and production division, we expect greater than typical white space and seasonality in North America, partially offset by strong international results in the fourth quarter. As a result, in our completion and production division, we anticipate sequential revenue to decrease 4% to 6% and margins to be down 25 to 75 basis points. In our drilling and evaluation division, we expect sequential revenue to be flat to down 2% and margins to increase 50 to 100 basis points. I will now turn the call back to Jeff.

Latin America revenue in Q3 was $996 million a.

A 2% increase sequentially.

This increase was primarily driven by higher project management activity across the region and increased drilling services in Argentina.

In North America, Q3 revenue was $2 4, billion% to 5% increase sequentially.

This increase was primarily driven by improved stimulation activity in U S land in Canada, and higher completion tool sales and increased wireline activity in the Gulf of America moves.

Moving on to other items in Q3, our corporate and other expense was $64 million, we expect our Q4 corporate expenses to increase about $5 million.

Jeff Miller: Thanks, Eric. Let me summarize the key takeaways from today's discussion. Halliburton delivered solid Q3 results with $5.6 billion in revenue. We took steps that will deliver estimated savings of $100 million per quarter, reset our 2026 capital budget, and idle equipment that no longer meets our return expectations. Our international growth engines, production services, artificial lift, unconventionals, and drilling are performing well in North America. Halliburton is executing its strategy to maximize value. Zeus electric fleets now make up over half of our active fleet. And iCruise CX is driving performance in key basins like the Permian, reinforcing our technology differentiation. Also, Halliburton and VoltaGrid agreed to launch an exciting new opportunity for international growth in data centers. And finally, we are committed to returning cash to shareholders, maintaining cost and capital discipline, and investing in differentiated technologies that drive long-term performance.

In Q3, we spent $50 million on this Aps for migration, which included milestone payments and is included in our results for Q4, we expect <unk> expenses to be about $40 million.

I am pleased with Halliburton's third quarter performance.

Net interest expense for the quarter was $88 million for Q4, we expect net interest expense to increase about $5 million.

Other net expense in Q3 was $49 million, which included $23 million due to the impairment of an investment in Argentina, and a mark to market gain on the derivatives, we expect Q4 expense to be about $45 million or.

Our normalized effective tax rate for Q3 was 21, 5% based on our anticipated geographic earnings mix, we expect our Q4 effective tax rate to be approximately flat.

I will begin todays discussion with our highlights from this quarter.

We delivered total company revenue of $5 6 billion and adjusted operating margin of 13%.

International revenue was $3 2 billion, a decrease of 2% year over year.

Capital expenditures for Q3 were $261 million for the full year 2025, we expect capital expenditures to be about 6% of revenue.

Jeff Miller: Now let's open it up for questions.

In Q3 tariffs impacted our business by $31 million.

Operator: Thank you, ladies and gentlemen. Once again, if you would like to ask a question, please press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, press star one. Again, we kindly ask everyone to limit themselves to one question and one follow-up. Your first question comes from the line of Arun Jayaram with J.P. Morgan. Please go ahead.

For Q4, we currently expect a gross impact of about $60 million increasing quarter on quarter due to section 203 to tariffs. These.

These impacts are included in our guidance now let me provide you with comments on our Q4 expectations.

In our completion and production division, we expect greater than typical white space and seasonality in North America, partially offset by strong international results into fourth quarter.

Arun Jayaram: Good morning, Jeff and Eric.

David Anderson: Gentlemen, good morning.

Jeff Miller: Gentlemen.

Eric Carre: Good morning.

Arun Jayaram: Morning. Gentlemen, you've described how your relationship with the VoltaGrid gives you a front seat to the emerging distributed power generation market. I was wondering if you could talk about your views on the evolution of that market over the last three, six, nine months and maybe talk a little bit about the strategic collaboration you announced last night, which I believe allows you to invest in project level economics internationally. But maybe you could provide a little bit more detail around that.

As a result in our completion and production division, we anticipate sequential revenue to decrease 4% to 6% and margins to be down 25% to 75 basis points.

In our drilling and evaluation division, we expect sequential revenue to be flat to down 2% and margins to increase 50 to 100 basis points I will now turn the call back to Jeff.

David Anderson: Yeah, certainly. Look, the demand for power and for AI is like nothing I've ever seen in terms of demand growth, and that we've watched that. And we also know that not only in the US but around the world, the rest of the world is a really big opportunity set for the same level of growth. And as we look ahead to what we've announced with VoltaGrid, this is where Halliburton invests in project economics. So we are sharing the economic value of projects together. And also it's an opportunity to effectively leverage what we each do really well, and you know, from a Halliburton perspective, we've got boots on the ground in 70 countries, we've got excellent execution skills, proven manufacturing, and we also have global scale, industrial global scale, which I think is critical.

Jeff Miller: Yeah, certainly. Look, the demand for power and for AI is like nothing I've ever seen in terms of demand growth, and that we've watched that. And we also know that not only in the US but around the world, the rest of the world is a really big opportunity set for the same level of growth. And as we look ahead to what we've announced with VoltaGrid, this is where Halliburton invests in project economics. So we are sharing the economic value of projects together. And also it's an opportunity to effectively leverage what we each do really well, and you know, from a Halliburton perspective, we've got boots on the ground in 70 countries, we've got excellent execution skills, proven manufacturing, and we also have global scale, industrial global scale, which I think is critical.

Thanks, Eric.

Let me summarize the key takeaways from today's discussion.

Halliburton delivered solid Q3 results with $5 $6 billion in revenue we.

We took steps that will deliver estimated savings of $100 million per quarter reset, our 2026 capital budget and idled equipment that no longer meets our return expectations.

Our international growth engines production services artificial lift unconventional and drilling are performing well.

In North America, Halliburton is executing its strategy to maximize value.

Zeus electric fleets now make up over half of our active fleet and I cruise CX is driving performance in key basins like the Permian reinforcing our technology differentiation.

Also halliburton and voltage grid agreed to launch an exciting new opportunity for international growth in data centers and.

And finally, we are committed to returning cash to shareholders, maintaining cost and capital discipline and investing in differentiated technologies that drive long term performance.

David Anderson: At the same time, both the grid has solved for how to execute these projects technically and at scale. And we've built a strong relationship over five years as that technology is developed. We've worked closely with VoltaGrid in our own business and that gives us a great deal of confidence in how they've gone about solving the technical problem requirements for data centers. And we're just super excited to be part of this whole venture going forward.

At the same time, both the grid has solved for how to execute these projects technically and at scale. And we've built a strong relationship over five years as that technology is developed. We've worked closely with VoltaGrid in our own business and that gives us a great deal of confidence in how they've gone about solving the technical problem requirements for data centers. And we're just super excited to be part of this whole venture going forward.

And now let's open it up for questions.

Thank you, ladies and gentlemen, once again, if you would like to ask a question. Please press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star one again.

We kindly ask everyone to limit themselves to one question and one follow up.

Your first question comes from the line of Arun <unk> with Jpmorgan. Please go ahead.

Good morning, Jeff and Eric Jimmy.

Gentlemen, good morning.

Arun Jayaram: Great. And Jeff, maybe my follow-up, you know, North American revenue was up 5% sequentially, a lot better than, you know, we had expected and maybe you'd guided to, and relatively flat on a year-over-year basis. Can you talk about some of the drivers of the outperformance in North America and thoughts on what this could mean for 2026?

North America revenue was $2 4 billion flat year over year.

During the third quarter, we generated $488 million of cash flow from operations $276 million of free cash flow and repurchased approximately $250 million of our common stock.

Morning.

Gentlemen, you described how your relationship with Volta grid.

Gives you a front seat to the emerging distributed power generation market I was wondering if you could talk about.

Your views on the evolution of that market over the last 369 months.

And maybe talk a little bit about the strategic collaboration you announced last night.

David Anderson: Well, look, we saw less white space than we expected in Q3, which obviously drove revenues better than what we would have thought. And I think it also gets to the strength of the customers that we work with, the solid programs that they have. And as I look towards 2026, it gives me a lot of confidence in Halliburton's positioning in the market, both how we execute and maybe even more importantly the technology that we're bringing to market. And as we described, put a couple of fleets to work and you know, see demand for not only the electric fleet, which is a fantastic piece of equipment, but maybe even more so Zeus IQ in terms of what that means to solving for EURs.

Jeff Miller: Well, look, we saw less white space than we expected in Q3, which obviously drove revenues better than what we would have thought. And I think it also gets to the strength of the customers that we work with, the solid programs that they have. And as I look towards 2026, it gives me a lot of confidence in Halliburton's positioning in the market, both how we execute and maybe even more importantly the technology that we're bringing to market. And as we described, put a couple of fleets to work and you know, see demand for not only the electric fleet, which is a fantastic piece of equipment, but maybe even more so Zeus IQ in terms of what that means to solving for EURs.

Which I believe allows you to invest in project level economics internationally, but maybe you could provide a little bit more detail around that.

Yes, certainly look the.

Demand for power and for AI is like nothing I've ever seen in terms of demand growth and that we've watched that.

And we also know that not only in the U S, but around the world. The rest of the World is a really big opportunity set for the same level of growth and.

As we look ahead to what we've announced with vault. The grid. This is where halliburton invest in project economics. So we are we are sharing the economic value of projects.

Together.

Arun Jayaram: Great, thanks Jeff.

And also it's an opportunity to effectively leverage what we do really well and.

David Anderson: Thank you.

Jeff Miller: Thank you.

Operator: Your next question comes from the line of Neil Mehta with Goldman Sachs. Please go ahead.

From a halliburton perspective, we've got boots on the ground in 70 countries, we've got excellent execution skills.

Jeff Miller: Hey Jeff and team, I want to spend more time talking about the Middle East opportunity as it relates to power.

Neil Mehta: Hey Jeff and team, I want to spend more time talking about the Middle East opportunity as it relates to power. Why specifically is that the region you think makes sense to be spending time on, and talk about some of the constraints that might exist in the Middle East in terms of really scaling the AI opportunity set, and how do you intend to debottleneck them?

Proven manufacturing and we also have.

Operator: Why specifically is that the region?

Jeff Miller: You think makes sense to be spending time on, and talk about some of the constraints that might exist in the Middle East in terms of really scaling the AI opportunity set, and how do you intend to debottleneck them?

Global scale industrial global scale, which I think is critical.

At the same time, both the grid has solved for.

How to execute these projects technically and at scale.

David Anderson: Look, I think that it's the Middle East and rest of world. I think our initial focus, Middle East, we see a lot of opportunity there. Obviously that's economy that is developing capabilities every single day and very much focused on looking forward to investment. And so you know, the other thing is there is certainly a lot of available energy in the Middle East and there is also a lot of capital in the Middle East. And so those things all conspire to make that very attractive.

Jeff Miller: Look, I think that it's the Middle East and rest of world. I think our initial focus, Middle East, we see a lot of opportunity there. Obviously that's economy that is developing capabilities every single day and very much focused on looking forward to investment. And so you know, the other thing is there is certainly a lot of available energy in the Middle East and there is also a lot of capital in the Middle East. And so those things all conspire to make that very attractive.

And we built a strong relationship over five years is that technology is developed.

Work closely with both the grid in our own business.

And that gives us a great deal of confidence and how they've gone about solving the technical.

Requirements for data centers, and we're just super excited to be part of that.

This whole venture going forward.

Great and just maybe my follow up.

North American revenue was up 5% sequentially a lot better than we had expected and maybe you had guided to relatively flat on a year over year basis can you talk about some of the drivers of the outperformance in North America and thoughts on what this could mean for 2026.

Doug Becker: Right.

Neil Mehta: Right. Super. Then, Jeff, I know it's too early to talk about 2026 at this point. We'll get more color on the fourth quarter call. But just as you look at what is still a very uncertain macro for North America in particular, just any early thoughts and helping us think through the picture for 2026. And based on early insights, early customer conversations.

David Anderson: Super.

Jeff Miller: Then, Jeff, I know it's too early to talk about 2026 at this point. We'll get more color on the fourth quarter call. But just as you look at what is still a very uncertain macro for North America in particular, just any early thoughts and helping us think through the picture for 2026. And based on early insights, early customer conversations.

Well look we saw less white space than we expected in Q3.

Obviously drove revenues.

Better than what we would have thought.

And I think it also gets to the strength of the customers that we work with.

David Anderson: Yeah, look, it is really early. Customers haven't produced budgets yet. At this point, we clearly are having discussions with customers. You know, if I step back and say 2026 is overall flattish with some bright spots is how I would describe all of 2026. You know, North America. We did stack some fleets in the quarter. Those probably don't come back to work. But here's what's more important to think about for 2026 in my view. And it's going to be looking at the mileposts as we go through 2026 because I think some important things are happening now. Number one, OPEC barrels are getting into the market. We know that North America in my view is probably below maintenance level spend and so. And then Mexico stays kind of probably where it is for a little while. But that decline in production there is also meaningful.

Jeff Miller: Yeah, look, it is really early. Customers haven't produced budgets yet. At this point, we clearly are having discussions with customers. You know, if I step back and say 2026 is overall flattish with some bright spots is how I would describe all of 2026. You know, North America. We did stack some fleets in the quarter. Those probably don't come back to work. But here's what's more important to think about for 2026 in my view. And it's going to be looking at the mileposts as we go through 2026 because I think some important things are happening now. Number one, OPEC barrels are getting into the market. We know that North America in my view is probably below maintenance level spend and so. And then Mexico stays kind of probably where it is for a little while. But that decline in production there is also meaningful.

The solid programs that they have.

As I look towards 2026, it gives me a lot of confidence in halliburton's.

Positioning in the market both.

How do we execute and maybe even more importantly, the technology that we're bringing to market and as we described but couple of news news fleets to work at.

And.

Demand for not only the electric fleet, which is a fantastic piece of equipment, but maybe even more so Zeus IQ in terms of what that means to.

Solving for AUR.

Great. Thanks, Jeff.

Thank you.

Your next question comes from the line of Neil Mehta with Goldman Sachs. Please go ahead.

Hey, Jeff and team.

Bend more time talking about the middle east opportunity as it relates to power in Q1, specifically is that the region. You think makes us to be spending time on and talk about some of the constraints that might exist in the middle East in terms of really scaling the AI opportunity set.

David Anderson: So if we think about Mexico declining, North America likely rolling over, and all the OPEC plus spare capacity in the market, that creates a real inflection point. Now when precisely that happens, less clear. But oil consumption demand continues to grow and that gives me a lot of confidence and I think that with the OPEC barrels sort of behind us, it creates real tightness, that sort of indisputable tightness in the market that I think the snapback will be super strong for us. Right.

So if we think about Mexico declining, North America likely rolling over, and all the OPEC plus spare capacity in the market, that creates a real inflection point. Now when precisely that happens, less clear. But oil consumption demand continues to grow and that gives me a lot of confidence and I think that with the OPEC barrels sort of behind us, it creates real tightness, that sort of indisputable tightness in the market that I think the snapback will be super strong for us.

And how do you intend to Debottleneck.

Look I think that.

It's the middle East and rest of World I think our initial focus middle East, we see a lot of opportunity. There obviously, that's a economy that is.

Developing capabilities.

Every single day, and very much focused on looking forward to investment.

Jeff Miller: All right, we'll stay tuned as you have more investor customer conversations. Thanks, Jeff.

Neil Mehta: Right. All right, we'll stay tuned as you have more investor customer conversations. Thanks, Jeff.

And so.

David Anderson: Yeah, thank you.

Jeff Miller: Yeah, thank you.

The other thing is there is.

Operator: Your next question comes from the line of David Anderson with Barclays. Please go ahead.

Certainly a lot of available energy in the Middle East and there is also a lot of capital in the middle East and so.

David Anderson: Hey, good morning.

David Anderson: Hey, good morning. So I just have a question about the margins which are quite a bit stronger than we were expecting this quarter. You talked about taking $100 million of costs out per quarter. How much of that was in this current quarter? I'm just kind of curious as to how much it impacted the numbers.

Doug Becker: So I just have a question about the margins which are quite a bit stronger than we were expecting this quarter. You talked about taking $100 million of costs out per quarter. How much of that was in this current quarter? I'm just kind of curious as to how much it impacted the numbers.

Those things all conspire to make that very attractive.

And finally, we took cost reduction actions that we expect will save approximately $100 million per quarter going forward.

Great and then Kevin I know, it's too early to talk about 26 at this point and we'll get more color on the fourth quarter call, but just.

Eric Carre: Yeah, let me give you some color, Dave. On the Q3 margin versus guidance. So, the first thing we had, about half of the beat, that came from reductions in labor cost that actually we realized the savings earlier than expected. As our operation teams move pretty quickly to get things done, then in terms of what came out of Operation between CNP and D and E, as Jeff just mentioned, very, very. A lot less white space in North America and strong performance from the Gulf of Mexico team. And then overall, just a strong international performance primarily from our completion tool and cementing business. And on the D and E side, the strong result came from our project management business in Latin America.

As you look at what is still a very uncertain macro for for North America. In particular, just any early thoughts and helping us think through.

That.

The picture for 2006.

Based on early invest early customer conversations.

Yes look it is really early customers haven't produced budgets yet at this point.

We clearly are having discussions with customers.

Step back and say 2006 as overall.

Flattish with some bright spots is how I would describe all of 26.

North America, we did stack some fleets in the quarter.

Probably not come back to work, but here's what's more important to think about for 2006 in my view and it's going to be looking at the Mileposts as we go through 'twenty six because I think some important things are happening now.

Number one OPEC plus barrels are getting into the market we know that.

Doug Becker: Okay, thank you. So, Jeff, you know, I'm asking a power question here. So with the partnership here, I'm curious.

David Anderson: Okay, thank you. So, Jeff, you know, I'm asking a power question here. So with the partnership here, I'm curious. About a couple things. Obviously we know VoltaGrid is bringing the power, so I guess maybe if you could just sort of simplify for us what HAL is bringing to the table here and then sort of secondarily, what science projects are we talking about here? Both agreed to send out a big 2.3-gigawatt project. Are you talking about that size? Are you talking more like 100, 200, 400, that kind of range and just kind of might as well throw this in there. What kind of timeline are we talking here? We're talking like 2028. Just kind of wondering about supply chain tightness and how that all lines up. Thanks.

North America and my view is.

Probably below maintenance level spend.

Saurabh Pant: About a couple things.

Doug Becker: Obviously we know VoltaGrid is bringing the power, so I guess maybe if you could just sort of simplify for us what HAL is bringing to the table here and then sort of secondarily, what science projects are we talking about here? Both agreed to send out a big 2.3-gigawatt project. Are you talking about that size? Are you talking more like 100, 200, 400, that kind of range and just kind of might as well throw this in there. What kind of timeline are we talking here? We're talking like 2028. Just kind of wondering about supply chain tightness and how that all lines up. Thanks.

So and then Mexico stays kind.

Okay.

Before we dive into the geographic results, let me talk about the bigger picture for oil and gas.

We share the well accepted view that oil and gas demand will continue to grow over the long term.

Probably where it is for a little while but that decline in production. There is also meaningful so if we think about Mexico declining.

North America likely rolling over and all of the OPEC plus spare capacity in the market.

That creates a real inflection point now when precisely that happens less clear, but oil content demand continues to grow and that gives me a lot of confidence and I think that with the OPEC barrels come sort of behind us it creates real tightness that sort of undisputable tightness in the market that.

David Anderson: Well, let me start with maybe the, the last question. From a supply chain standpoint, VoltaGrid is in a fantastic position from a supply chain standpoint and comfortable with where they are from a size of project. You know, we're aligned with VoltaGrid around projects of the size and scale that they're talking about. And so I think they, you know, I'm not going to forecast size of projects, but feel comfortable they can be pretty big. And then what does Halliburton bring? And I think Halliburton brings some very important things, particularly I would say industrial scale and working internationally. And we've all seen how difficult that can be for companies as they scale internationally. We've seen a lot of them, you know, less than successful as they scale and you know, putting boots on the ground, managing projects, investing in projects, customer relationships.

Jeff Miller: Well, let me start with maybe the, the last question. From a supply chain standpoint, VoltaGrid is in a fantastic position from a supply chain standpoint and comfortable with where they are from a size of project. You know, we're aligned with VoltaGrid around projects of the size and scale that they're talking about. And so I think they, you know, I'm not going to forecast size of projects, but feel comfortable they can be pretty big. And then what does Halliburton bring?

I think the snapback will be super strong for us.

Alright, Alright, we'll stay tuned as we have more investor customer conversations thanks, Jeff Yeah.

Yes.

Your next question comes from the line of David Anderson with Barclays. Please go ahead.

Hey, good morning.

Had a question about the margins, which are quite a bit stronger than we were expecting this quarter, you talked about taking $100 million of cost out per quarter I'm not sure that within this current quarter I'm, just kind of curious as to how much it impacted the numbers.

And I think Halliburton brings some very important things, particularly I would say industrial scale and working internationally. And we've all seen how difficult that can be for companies as they scale internationally. We've seen a lot of them, you know, less than successful as they scale and you know, putting boots on the ground, managing projects, investing in projects, customer relationships. There's a long list of things that Halliburton brings to the international markets where we are clearly can be additive, and then from a VoltaGrid perspective, clear on what they're doing.

Yes, let me give you some color Dave on the on the Q3 margin versus guidance. So.

The first thing we had about half of the beat came from reductions in labor cost.

Actually we realize savings earlier than expected as our operation teams moved pretty quickly to.

David Anderson: There's a long list of things that Halliburton brings to the international markets where we are clearly can be additive, and then from a VoltaGrid perspective, clear on what they're doing.

To get things done.

Then in terms of what came out of operation between CMP and DNA as Jeff just mentioned very very.

Doug Becker: Great. Thanks, Jeff. Appreciate it.

David Anderson: Great. Thanks, Jeff. Appreciate it.

A lot less white space in North America, and then strong performance from the Gulf of America team and then overall just a strong international performance, primarily from our completion tool and cementing business.

David Anderson: Thank you.

Jeff Miller: Thank you.

Operator: Your next question comes from the line of Saurabh Pant, Bank of America. Please go ahead.

Saurabh Pant: Hi, good morning, Jeff and Eric.

Eric Carre: Morning.

Jeff Miller: Morning.

Jeff Miller: Morning, Jeff.

Eric Carre: Morning.

Saurabh Pant: Jeff. Maybe I'll continue with that line of questioning on the power front, but pivot a little bit on the CapEx side, because this business is pretty CapEx intensive. Not something that you're not used to, right, Jeff, over the past, but how do you think about that? How do you think you'll fund that? Not just at the VoltaGrid level, but how does the collaboration outside the US, right? So the Middle East like you're targeting right now, how does that look like from a funding from a CapEx standpoint?

Saurabh Pant: Maybe I'll continue with that line of questioning on the power front, but pivot a little bit on the CapEx side, because this business is pretty CapEx intensive. Not something that you're not used to, right, Jeff, over the past, but how do you think about that? How do you think you'll fund that? Not just at the VoltaGrid level, but how does the collaboration outside the US, right? So the Middle East like you're targeting right now, how does that look like from a funding from a CapEx standpoint?

And on the <unk> side.

The strong results came from our project management business in Latin America.

Okay. Thank you.

No im asking to power question here, so with the partnership here.

Got a couple of things, obviously, we know about their grids breaking the power. So I guess, maybe if you could just sort of simplify for us what how is bringing to the table here.

And then sort of secondarily what sized projects that we're talking about here are both agreed to send out the big two three gigawatt project are you talking about that size are you talking more like.

We also know there is a tremendous amount of investment required to maintain production at current levels, let alone to sustainably grow production.

Recent estimates are that 90% of upstream spending simply offset natural declines.

Eric Carre: So, to be clear about how we're thinking about it, Saurabh, so our CapEx budget for next year is 1 billion. Whatever we do around power with VoltaGrid in the international market is not included in that 1 billion. The overall intent is to share total project economics. So we will be funding this on a project-by-project basis, incrementally over the 1 billion or whatever baseline CapEx we have for our oil and gas business.

Underscoring the requirement for ongoing oil and gas investment.

Near term operators are navigating volatile commodity prices as OPEC, plus spare capacity returns and trade concerns persist.

200, 400 of that kind of range and just kind of model, both Otis and there what kind of timeline are we talking here are we talking like 2028, and just kind of wanted to supply chain tightness and how that all lines up thanks.

Well, let me start with.

Maybe the last question from a supply chain standpoint, both the grant is in a fantastic position from a supply chain standpoint, and comfortable with where they are from a size of the project.

Saurabh Pant: Okay, okay, I got it. No, that's helpful, Eric. And then one for the North America market.

Saurabh Pant: Okay, okay, I got it. No, that's helpful, Eric. And then one for the North America market. Right. Like somebody noted on the call, your performance has been a lot better than a lot of us were thinking. It seems like, Jeff, correct me if I'm wrong, it seems like you are not trying to be everything to everybody. You're targeting the customers, the large sophisticated customers that value what you bring to the table. Right. Just maybe talk to that a little bit. How are you targeting the North American market with the aim of maximizing value like you've been trying to do?

We're aligned with Volta Grande around projects of the size and scale that they are talking about and so I think.

The impact is most apparent in North America, where we expect customers to maintain the cautious posture they adopted in the second quarter.

Jeff Miller: Right.

Saurabh Pant: Like somebody noted on the call, your performance has been a lot better than a lot of us were thinking. It seems like, Jeff, correct me if I'm wrong, it seems like you are not trying to be everything to everybody. You're targeting the customers, the large sophisticated customers that value what you bring to the table.

I'm not going to forecast.

As the projects, but feel comfortable they can be pretty big.

And then.

What does halliburton bring in I think Halliburton brings some very important things.

Doug Becker: Right.

Saurabh Pant: Just maybe talk to that a little bit. How are you targeting the North American market with the aim of maximizing value like you've been trying to do?

Particularly I would say industrial scale and working internationally.

All seen how difficult that can be for companies as they scale internationally, we've seen a lot of them.

David Anderson: Well, look, maximizing value means that we are focused on efficiency and technology, and electric fleets bring that. But we continue to invest in technology in North America, and I think that's where the point of bifurcation happens. And we've been clearly targeting customers that want to use that technology, both the electric and stepping forward into the subsurface and the control of sand, and a lot of the things that Zeus IQ and the many things that we've built along the way allow customers to do. And we continue to deepen that competitive advantage in terms of how we help customers solve for EUR, sand control, measure, sand performance, all of those things in the subsurface. And so very deliberate. We don't compete in the spot market. We don't want to be competing in the spot market.

Jeff Miller: Well, look, maximizing value means that we are focused on efficiency and technology, and electric fleets bring that. But we continue to invest in technology in North America, and I think that's where the point of bifurcation happens. And we've been clearly targeting customers that want to use that technology, both the electric and stepping forward into the subsurface and the control of sand, and a lot of the things that Zeus IQ and the many things that we've built along the way allow customers to do. And we continue to deepen that competitive advantage in terms of how we help customers solve for EUR, sand control, measure, sand performance, all of those things in the subsurface. And so very deliberate. We don't compete in the spot market. We don't want to be competing in the spot market.

Less than successful as they scale and.

But it's on the ground managing projects investing in projects customer relationships. There is a long list of things that Halliburton brings to the international markets.

We are clearly can be additive and then from a bolt of grid perspective clear on what they're doing.

Great. Thanks, guys I appreciate it.

Thank you.

Your next question comes from the line of Sara.

Bank of America. Please go ahead.

Hi, good morning <unk>.

Good morning, good morning.

Just maybe I'll continue with that line of questioning on the power front.

But we've had a little bit on the capex side of things because this business is pretty capex intensive.

David Anderson: You know, you've seen us stack some diesel dual fuel fleets in the quarter for that very reason. And so yeah, clearly we are not going to be everything to everyone. We're very pleased with the technology performance and pleased with the uptake on the technology. So there's really not a good reason to continue to burn up dual fuel equipment in a market that's not making returns. We have opportunities to send dual fuel equipment overseas, which we may do. We probably will do.

You know, you've seen us stack some diesel dual fuel fleets in the quarter for that very reason. And so yeah, clearly we are not going to be everything to everyone. We're very pleased with the technology performance and pleased with the uptake on the technology. So there's really not a good reason to continue to burn up dual fuel equipment in a market that's not making returns. We have opportunities to send dual fuel equipment overseas, which we may do. We probably will do.

Something that you are not used to date there Jeff.

For the past, but how do you think about that how do you think you would fund that.

But the auto grade level, but how does the collaboration outside the U S right to the middle East like Youre targeting right now how does that look like from a from a funding from a capex standpoint.

So to be to be clear about how we're thinking about it is.

So our Capex budget for next year is 1 billion whatever we do around power with Volta grid into international market is not included in that $1 billion.

Jeff Miller: Or we just idle it and wait.

Or we just idle it and wait for later when things get tighter and we put it back to work then.

David Anderson: For later when things get tighter and we put it back to work then.

The overall intent is to share total project economics. So we will be funding. This on a project by project basis incrementally over the $1 billion of whatever baseline Capex, we have for our oil and gas business.

Doug Becker: Makes sense.

Saurabh Pant: Makes sense. Makes sense. Okay, Jeff, I'll turn it back. And by the way, as much as I like the $100 million in cost savings, I'm waiting for the day when activities going up and we are adding labor cost. But until then, thanks a lot for that color.

Saurabh Pant: Makes sense. Okay, Jeff, I'll turn it back. And by the way, as much as I like the $100 million in cost savings, I'm waiting for the day when activities going up and we are adding labor cost. But until then, thanks a lot for that color.

David Anderson: All right, thank you.

Jeff Miller: All right, thank you.

Okay. Okay I got it no that's helpful hub.

Operator: Your next question comes from the line of James West with Melius Research. Please go ahead.

And then one for the North America market right like somebody noted on the call. Our performance has been a lot better than a lot of us were thinking it seems like just correct me if I'm wrong. It seems like you are not trying to be everything to everybody you're targeting the customers.

James West: Hey, good morning, Jeff.

James West: Hey, good morning, Jeff. Morning, Eric.

Jeff Miller: Morning, Eric.

David Anderson: Morning, James.

Jeff Miller: Morning, James.

Eric Carre: Morning, James.

James West: one of you guys have been dancing around the idea of a good relationship with their questions so far. But I was hoping to just create some clarity here. We obviously know they have a distributed power technology that is going to be extremely useful. We understand the Middle East is energy rich, but really outside of industrial scale, is it not the relationship that you bring to the table? I mean, nobody walks into the Kingdom of Saudi Arabia and says, hey guys, can I do business?

Sophisticated customers that value what you bring to the table, but just maybe talk to that a little bit how are you targeting the north American market with the aim of maximizing value like you've been trying to do it.

Well look maximizing value means that we are focused on efficiency and technology and.

Electric fleets bring that but we continue to invest in technology in North America, and I think that's where the.

Point of bifurcation happens and we have been.

Clearly targeting customers that want to use that technology, both the electric and stepping forward into the subsurface and the control of sand and a lot of the things that <unk> and the many things that we built along the way allow customers to do and we continue to deepen that competitive advantage.

David Anderson: Correct. That's when I describe global industrial scale. I'm including customer relationships, markets, knowledge of markets, history in markets, and history of execution in markets that is well respected by most of the people in those markets. Clearly, by the people in those markets, customers, governments, and all the rest of the.

Jeff Miller: Correct. That's when I describe global industrial scale. I'm including customer relationships, markets, knowledge of markets, history in markets, and history of execution in markets that is well respected by most of the people in those markets. Clearly, by the people in those markets, customers, governments, and all the rest of the.

In terms of how we help customers solve for EUR sand control measure sand performance all of those things and the subsurface and so very deliberate.

Doug Becker: Exactly.

James West: Exactly. That's exactly what we see. And then maybe on if we think about 26, and I know North America, we can kind of leave that out for now because of the uncertainty. But it looks to me like Saudi Arabia's bottoming and is going to recover here in the first half. Deepwater coming back in the second half. Is that consistent with what your customers are kind of alluding or telling you at this point?

James West: That's exactly what we see.

In international markets activity remains broadly steady from here as we look forward to 2026.

David Anderson: And then maybe on if we think.

In this environment, we took steps to address the near term conditions.

First we improved our cost structure by right sizing, our operations and overhead, which we expect will reduce quarterly labor costs by roughly $100 million.

James West: About 26, and I know North America, we can kind of leave that out for now because of the uncertainty. But it looks to me like Saudi Arabia's bottoming and is going to recover here in the first half. Deepwater coming back in the second half. Is that consistent with what your customers are kind of alluding or telling you at this point?

We don't compete in the spot market, we don't want to be competing in the spot market.

Yes, you've seen the stack some diesel dual fuel fleets in the quarter for that very reason and so yes, clearly we are not going to be everything to everyone.

Beginning in the fourth quarter.

We are.

Very pleased with the technology performance and pleased with the uptake on the technology. So there's really not a good reason that continue to burn up.

David Anderson: Yes, I mean our Deepwater business is getting traction now and continues to strengthen as projects start and as we win projects. So that's sort of the view of that into 2026 and beyond, you know, Middle East, Saudi in particular. You know, I expect that picks up as we go into next year. Now I don't think that it springs back to maybe where it was, but not declining is a form of improving, and I think there will be some improvement on top of that as we go into 2020, middle of 2026. So yeah, look, the international business looks solid. Our technical position internationally looks very solid in terms of the growth engines I described. The contract wins we're having, and really our value proposition just continues to gain traction with customers all around the world. Very happy with that. Got it.

Jeff Miller: Yes, I mean our Deepwater business is getting traction now and continues to strengthen as projects start and as we win projects. So that's sort of the view of that into 2026 and beyond, you know, Middle East, Saudi in particular. You know, I expect that picks up as we go into next year. Now I don't think that it springs back to maybe where it was, but not declining is a form of improving, and I think there will be some improvement on top of that as we go into 2020, middle of 2026. So yeah, look, the international business looks solid. Our technical position internationally looks very solid in terms of the growth engines I described. The contract wins we're having, and really our value proposition just continues to gain traction with customers all around the world. Very happy with that. Got it.

Feel equipment in a market that's not making the returns we have.

Second we reset our capital expenditures target for next year and as a result, I expect capital spending in 2026 to decline by almost 30% to around $1 billion.

Have opportunities to us and don't feel equipment overseas, which we may do we probably will do or we just idle and wait for later when things get tighter and we put them back to work then.

Makes sense makes sense, okay, yes, I've done it back and by the way as much as I like the $100 million in cost saving them waiting for the day when activity is going up and we are adding labor cost, but I would say then.

Thanks, a lot for that color.

Alright, thank you.

Your next question comes from the line of James West with Melius Research. Please go ahead.

Hey, good morning, Jeff Foreign Eric.

Good morning, John and James.

So would it be.

Guys have been dancing around.

Both are good relationship with your questions. So far but I was hoping to just create some clarity here.

Keith Mackey: Great.

James West: Great. Thanks, Jeff.

James West: Thanks, Jeff.

David Anderson: Thank you.

Jeff Miller: Thank you.

Operator: Your next question comes from the line of Doug Becker of Capital One, please go ahead.

We obviously know they have a distributed power.

Technology that is going to be extremely useful we understand the middle east as energy rich, but really outside of industrial scale is it not the relationship that you bring to the table I mean, nobody walks into the kingdom of Saudi Arabia.

Doug Becker: That was a good segue, Jeff. You've been highlighting the growth engines. Earlier this year you talked about those engines could add two and a half, maybe $3 billion of annual revenue three to five years. How do you think Halliburton's progressing relative to those targets? I assume you feel pretty comfortable that Halliburton should be growing, outgrowing the industry internationally given those growth engines.

Hey, guys can I do business.

Correct and Thats, what Ive described global industrial scale, including customer relationships market knowledge of markets history and markets in history of execution in markets.

David Anderson: Yeah, they're on track. I mean to do what we described. I pointed out a few of the anecdotes around the progress, but the progress is really deep-rooted in our value proposition. And so these are strategic opportunities that continue to gain traction globally, whether intervention. You've seen the acquisition of Optime, which is playing a more and more meaningful role. I know we've just, I think there was a press release just last night or yesterday around application of that in the North Sea with Aker BP, but that continues to gain traction really in all deep water markets. Very excited about that. Artificial lift continues to gain traction throughout the Middle East and Latin America. So that's very much on track.

Jeff Miller: Yeah, they're on track. I mean to do what we described. I pointed out a few of the anecdotes around the progress, but the progress is really deep-rooted in our value proposition. And so these are strategic opportunities that continue to gain traction globally, whether intervention. You've seen the acquisition of Optime, which is playing a more and more meaningful role. I know we've just, I think there was a press release just last night or yesterday around application of that in the North Sea with Aker BP, but that continues to gain traction really in all deep water markets. Very excited about that. Artificial lift continues to gain traction throughout the Middle East and Latin America. So that's very much on track.

It is well respected by.

Most of the people in those markets clearly by the people in those markets customers and governments and all the rest.

Exactly that's what that's what that's exactly what we say.

And then maybe if we think about 'twenty six and I know in.

North America, we can kind of leave that for now because of the uncertainty, but it looks to me like Saudi is bottoming and it is going to recover here in the first half deepwater coming back in the second half is that consistent with what.

Your customers or kind of alluding or telling you at this point.

David Anderson: Drilling technology continues to advance with automation. Drilling has done some just amazing work in terms of automated drilling, controlling or automating not only the rig but the hydraulics, which is a key technical differentiator for Halliburton. And then in unconventionals, we continue to look. We applied the technology of Sensori and continuous pumping in Argentina. Those are market firsts there. They have an impact, and, you know, a positive impact for customers and for Halliburton. We see the Middle East the same way, and we see a lot of opportunity. Even Australia, where we've done quite a bit of work in international and conventional. So very much on track and super excited about the differential growth opportunity that Halliburton has in these areas.

Drilling technology continues to advance with automation. Drilling has done some just amazing work in terms of automated drilling, controlling or automating not only the rig but the hydraulics, which is a key technical differentiator for Halliburton. And then in unconventionals, we continue to look. We applied the technology of Sensori and continuous pumping in Argentina. Those are market firsts there. They have an impact, and, you know, a positive impact for customers and for Halliburton. We see the Middle East the same way, and we see a lot of opportunity. Even Australia, where we've done quite a bit of work in international and conventional. So very much on track and super excited about the differential growth opportunity that Halliburton has in these areas.

Yes, I mean, our deepwater business is getting traction now and continues to strengthen as projects start and as we win projects. So thats sort of a view of that into 26 and beyond.

The middle East Saudi in particular.

Expect that picks up as we go into next year now I don't think that it springs back to maybe where it was.

But not declining as a form of improving and I think there will be some improvement on top of that as we go into 2020 middle of 2026, and so yeah look the international business looks solid our technical position internationally looks very solid in terms of the growth engines I described the contract wins, we're having.

And really our value proposition is just continues to.

<unk> gained traction with customers are all around the world So very happy with that.

Got it great. Thanks, Jeff.

Doug Becker: Definitely sounds encouraging. Wanted to touch base on Brazil, specifically. Halliburton recently received a completion and stimulation contract expected to start next year. We've been hearing some of the offshore drilling contractors have been having one-on-one discussions with Petrobras about reducing costs. Just what's your outlook for Brazil, and has Halliburton been approached about helping to reduce costs?

Thank you.

Your next question comes from the line of Dawn Becker with capital one. Please go ahead.

Good Segway, Jeff you've been highlighting the growth engines earlier. This year you talked about those engines could add two and a half maybe $3 billion of annual revenue three to five years.

Do you think <unk> progressing relative to those targets.

I assume you feel pretty comfortable that halliburton should be growing outgrowing the industry.

David Anderson: Look, we're super positive about Brazil. We've got a strong position there both with IOC work and with Petrobras. Again, continue to develop technology specific for that market. We're in all sorts of discussions with CENPES, and, look, no, in terms of the market in Brazil, we see growth, execution, and technology uptake given the complexity of that deepwater market.

Jeff Miller: Look, we're super positive about Brazil. We've got a strong position there both with IOC work and with Petrobras. Again, continue to develop technology specific for that market. We're in all sorts of discussions with CENPES, and, look, no, in terms of the market in Brazil, we see growth, execution, and technology uptake given the complexity of that deepwater market.

Internationally, given those growth engines.

Yes. They are on track to do what we described I pointed out a few of the anecdotes around the progress, but the progress is really deep rooted in our value proposition and so these are strategic.

Opportunities that continue to gain traction globally, whether intervention.

<unk> seen the acquisition of uptime, which is playing a more and more meaningful role I know, we've just I think there was a press release, just last night or yesterday around application of that in the north sea with Aker BP, but that continues to.

Doug Becker: Got it. Thank you, Jeff.

Operator: Your next question comes from the line of Scott Gruber with Citigroup. Please go ahead.

Doug Becker: Yes, good morning.

Scott Gruber: Yes, good morning.

David Anderson: Morning, Scott.

Jeff Miller: Morning, Scott.

Eric Carre: Morning.

<unk> gained traction really in all deepwater markets I'm very excited about that.

Doug Becker: Morning. You guys have taken a very disciplined approach, you know, with respect to idling frac crews, you know, where you will make a reasonable return. I'm just curious, you know, kind of.

Scott Gruber: Morning. You guys have taken a very disciplined approach, you know, with respect to idling frac crews, you know, where you will make a reasonable return. I'm just curious, you know, kind of. Where do you stand in that process? Was it more weighted to kind of Q3 or whether idling be more weighted to Q4 when customers slow down? I'm just trying to think through your market comments, you know, around North America being down 12% to 13%, trying to separate, you know, the underlying market from the idling trend.

Third we are actively managing our deployed capital and we will continue to idle relocate or retire equipment that does not meet our return thresholds.

Artificial lift continues to gain traction throughout the middle East Latin America. So that's very much on track drilling technology continues to advance.

Jeff Miller: Where do you stand in that process?

Doug Becker: Was it more weighted to kind of Q3 or whether idling be more weighted to Q4 when customers slow down? I'm just trying to think through your market comments, you know, around North America being down 12% to 13%, trying to separate, you know, the underlying market from the idling trend.

With automation and drilling Dunson, just amazing work in terms of automated drilling.

Trolling are automating not only the rig, but the hydraulics, which is our key technical differentiator for Halliburton.

And then in unconventional is continue to look we have applied the technology sensory and continuous pumping and Argentina. Those are market first they're they have an impact.

David Anderson: Look, I think that we will. We idled some crews probably later in the quarter. We may see some of that in Q4. I think the, you know, the idling and the white space in some respects go together. However, some of those crews that have been retired or not retired but idled will stay idle until we see margins snap back on them. But I think what's important as we look at the milestone that I described is that, you know, the first thing to snap back or recover will be North America. And it's been that way for a decade and a half, and we've seen it through several downturns. And so we fully expect that the recovery will come quickly in North America when it comes. And we're going to want those fleets available to fill in gaps and actually take on some bigger work.

Jeff Miller: Look, I think that we will. We idled some crews probably later in the quarter. We may see some of that in Q4. I think the, you know, the idling and the white space in some respects go together. However, some of those crews that have been retired or not retired but idled will stay idle until we see margins snap back on them. But I think what's important as we look at the milestone that I described is that, you know, the first thing to snap back or recover will be North America. And it's been that way for a decade and a half, and we've seen it through several downturns. And so we fully expect that the recovery will come quickly in North America when it comes. And we're going to want those fleets available to fill in gaps and actually take on some bigger work.

A positive impact for customers and for Halliburton.

See the middle East the same way and we see a lot of opportunity, even Australia, where we've done quite a bit of work in international unconventional so.

Very much on track and Super excited about the differential growth opportunity that Halliburton has in these areas.

Yes, definitely sounds encouraging I wanted to touch based on Brazil, specifically Halliburton recently received a completion and stimulation contract.

Just to start next year, we've been hearing some of the offshore drilling contractors have been having one on one discussions with Petrobras about reducing costs.

Just what's your outlook for Brazil, and Halliburton was approached about helping to reduce costs.

Doug Becker: I appreciate the color. Then turning to the CapEx budget for next year, I think at $1 billion, it's a bit below where expectations were at. But same time, your frac maintenance CapEx should be coming down a lot with the idling and investment in EFRC. Can you discuss kind of within the budget, your ability to continue to make the strategic investments in the D and E toolkit and your growth verticals within cmp? It seems like those investments have borne a lot of fruit here in terms of share gains. So just kind of talk through the moving pieces in the budget next year and your ability to still make those strategic investments.

Scott Gruber: I appreciate the color. Then turning to the CapEx budget for next year, I think at $1 billion, it's a bit below where expectations were at. But same time, your frac maintenance CapEx should be coming down a lot with the idling and investment in EFRC. Can you discuss kind of within the budget, your ability to continue to make the strategic investments in the D and E toolkit and your growth verticals within cmp? It seems like those investments have borne a lot of fruit here in terms of share gains. So just kind of talk through the moving pieces in the budget next year and your ability to still make those strategic investments.

Okay.

Look we're super positive about Brazil, we've got a strong position there both with IOC work and with Petrobras.

Again continue to develop technology specific for that market, where in all sorts of discussions with <unk>.

Look.

In terms of the market in Brazil, we see growth and execution and technology uptake given the complexity of that deepwater market.

Got it thank you Jeff.

Okay.

Your next.

Question comes from the line of Scott Gruber with Citigroup. Please go ahead.

David Anderson: Look, let me start the capital budget. The 30% reduction is still in line, I think, largely, but it's, look, as you described investment cycles, we just view it as we don't. That's where we need to be from a strategic perspective. We continue to invest in R&D. We continue to invest in the technology that's differentiating. We have quite a bit of that, but we also have the ability to manage that inside of the budget that we have, and I think that driving some tightness in equipment is a good thing. I expect that you'll continue to see Halliburton investing in the technology that makes the outsized market returns.

Jeff Miller: Look, let me start the capital budget. The 30% reduction is still in line, I think, largely, but it's, look, as you described investment cycles, we just view it as we don't. That's where we need to be from a strategic perspective. We continue to invest in R&D. We continue to invest in the technology that's differentiating. We have quite a bit of that, but we also have the ability to manage that inside of the budget that we have, and I think that driving some tightness in equipment is a good thing. I expect that you'll continue to see Halliburton investing in the technology that makes the outsized market returns.

Yes, good morning.

Good morning, Scott.

Good morning.

You got it.

A very disciplined approach with respect to idling Frac crews, where you will make a reasonable return.

Finally, and most importantly, we took these steps while maintaining a strong focus on our technology development, our growth engines and our value proposition.

Just curious.

Where do you stand in that process.

More weighted to <unk> or with idling be more weighted to <unk> customers slow down.

I think through your market comments on North America, being down 12% to 13% and trying to separate the underlying market from from the idling trends.

Look I think that we will we idled.

Some crews probably later in the quarter.

Doug Becker: I guess another way to kind of phrase it is, do you think you can still deliver the share gains in DME and PMP with the billion-dollar budgets next year?

Scott Gruber: I guess another way to kind of phrase it is, do you think you can still deliver the share gains in DME and PMP with the billion-dollar budgets next year?

You may see some of that in Q4, I think the the idling and the white space in some respects go together however.

Some of those crews that have been retired or not retired but idle will stay idle until we see margins snapped back on them.

David Anderson: Unequivocally, yes.

Jeff Miller: Unequivocally, yes.

Doug Becker: Great.

Scott Gruber: Great. I appreciate it. Thank you.

Jeff Miller: I appreciate it. Thank you.

David Anderson: Thank you.

Jeff Miller: Thank you.

But I think what's important is we look at the.

Operator: Your next question comes from the line of Mark Bianchi with TD Cowen. Please go ahead.

Myles posts that I described is that the first thing.

Doug Becker: Hey, thank you. I wanted to pivot back to some stuff on VoltaGrid. Is the arrangement that was announced last night, this international collaboration, is that an exclusive arrangement where Halliburton is sort of exclusively deploying the VoltaGrid technology or can they go work with someone else if they choose to?

Marc Bianchi: Hey, thank you. I wanted to pivot back to some stuff on VoltaGrid. Is the arrangement that was announced last night, this international collaboration, is that an exclusive arrangement where Halliburton is sort of exclusively deploying the VoltaGrid technology or can they go work with someone else if they choose to?

Snapped back or recover will be North America, and it's been that way for a decade and a half.

We've seen it through several downturns.

And so we fully expect that the recovery will come quickly in North America. When it comes in we're going to want those fleets available to fill in gaps and actually take on some bigger work.

David Anderson: Well, look, it's exclusive in parts and I think where we're targeted, it's exclusive with certainty over a pretty good period of time. I'm not going to get into all the mechanics of the agreement, but the relationship is such that I feel confident that we are the partner and, like I said, co-investing and the work that we've done to get to where we are has all been important work and so quite confident in where that goes. And so I think the more important takeaway is this is a fantastic growth opportunity for Halliburton and for VoltaGrid internationally.

Jeff Miller: Well, look, it's exclusive in parts and I think where we're targeted, it's exclusive with certainty over a pretty good period of time. I'm not going to get into all the mechanics of the agreement, but the relationship is such that I feel confident that we are the partner and, like I said, co-investing and the work that we've done to get to where we are has all been important work and so quite confident in where that goes. And so I think the more important takeaway is this is a fantastic growth opportunity for Halliburton and for VoltaGrid internationally.

So I appreciate the color.

And then turning to the Capex budget for next year.

The $1 billion, it's a bit below where expectations were.

So part of your Frac maintenance Capex should be coming down a lot with the idling and investment <unk>, Greg can you discuss kind of within the budget your ability to continue to make the strategic investments the <unk> toolkit and your growth verticals within CMP. It seems like those investments.

I am Super confident and the Halliburton team, our ability to execute and the strength of our competitive position.

Near term conditions will not change our focus on delivering value for our customers and leading financial performance for our shareholders.

The board a lot of fruit here in terms of share gains and just kind.

To talk through the moving pieces in the budget next year.

Your ability to still make those strategic investments.

Doug Becker: Indeed, Jeff, thank you for that. If there's some dollar of spend that needs to occur in 2026 on.

Marc Bianchi: Indeed, Jeff, thank you for that. If there's some dollar of spend that needs to occur in 2026 on top of the billion-dollar CapEx that you have related to this, is there? A certain percentage that Halliburton would be obligated to, is it a 50% obligation or anything like that? You can help us. So if we see a press release from Volt that they're spnding a billion dollars, and we can sort of get a sense of what that might mean for Halliburton's requirement.

Now, let's turn to our geographic results.

I'll start with the international markets, where Halliburton delivered quarterly revenue of $3 $2 billion roughly flat to the second quarter.

Look let me start with the capital budget, the 30% reduction is still in line I think largely.

For the fourth quarter, we expect international revenue to increase 3% to 4% on roughly flat activity levels with typical seasonal software and completion tool sales.

Jeff Miller: Top of the billion-dollar CapEx that you have related to this, is there?

But it's.

Look.

Doug Becker: A certain percentage that Halliburton would be obligated to, is it a 50% obligation or anything like that? You can help us. So if we see a press release from Volt that they're spending a billion.

And as you described investment cycles.

We just view it as we know and that's where we need to be from a strategic perspective, we continue to invest in R&D, we continue to invest in the technology that's differentiating.

Jeff Miller: Dollars, and we can sort of get.

Doug Becker: A sense of what that might mean for Halliburton's requirement.

Quite a bit of that but we also have the ability to manage that inside of the budget that we have and I think then driving some tightness and equipment is a good thing and I expect that.

David Anderson: Look, I think we'll be investing, we will be investing alongside them. I think the capital, we know how to raise capital, and we know how to get capital. I think that these projects are eminently capitalizable. So, I don't see that as any kind of impediment whatsoever. If you see them announcing capital capital investment around the world, we're likely, more than likely, we are part of that.

Jeff Miller: Look, I think we'll be investing, we will be investing alongside them. I think the capital, we know how to raise capital, and we know how to get capital. I think that these projects are eminently capitalizable. So, I don't see that as any kind of impediment whatsoever. If you see them announcing capital capital investment around the world, we're likely, more than likely, we are part of that.

Yes.

Yes, Youll continue to see Halliburton investing in the technology that makes the outsized market returns.

I guess another way to phrase. It is do you think you can still deliver the fair share gains.

India, TMT with $1 billion budgets next year.

Doug Becker: Okay, thank you so much, Jeff. I'll turn it back.

Marc Bianchi: Okay, thank you so much, Jeff. I'll turn it back.

Jeff Miller: Thank you.

Unequivocally yes.

Operator: The next question comes from the line of Derek Podhaizer with Piper Sandler. Please go ahead.

Alright I appreciate it thank you.

Thank you.

Your next question comes from the line of Marc Bianchi with TD Cowen. Please go ahead.

Doug Becker: Hey, good morning.

Derek Podhaizer: Hey, good morning. I just wanted to go back to the theme around idling equipment. If we can get a little bit more color, maybe help us understand how many fleets that you've idled, how many you expect to be permanently impaired, and how many you think might go back to work. Just trying to get a sense of the total market idling equipment. We've heard that from one of your peers last week. How significant could this accelerated attrition really be for the market and create a better setup from a supply and demand perspective for 2026?

Jeff Miller: I just wanted to go back to.

David Anderson: The theme around idling equipment.

Saurabh Pant: If we can get a little bit.

David Anderson: More color, maybe help us understand how many fleets that you've idled, how many you expect to be permanently impaired, and how many you think might go back to work. Just trying to get a sense of the total market idling equipment. We've heard that from one of your peers last week. How significant could this accelerated attrition really be for the market and create a better setup from a supply and demand perspective for 2026?

Okay. Thank you.

I wanted to pivot back to some some stuff on Volta.

Yes.

Arrangement that was announced last night. This international collaboration is that an exclusive arrangement, where halliburton is sort of exclusively.

Deploying the Volta.

Technology or can they go work with someone else if they choose to.

Jeff Miller: Well, let me. We're going to idle things that aren't.

Jeff Miller: Well, let me. We're going to idle things that aren't economic, and that's really the way we approach it. It's not so much a number of things. The way I think about attrition, and I think this is what we're really seeing in the marketplace. We, in fact, are idling things and they remain idle. They're not being bled back into the fleet to help shore up underperforming assets elsewhere for customers. And I think that is really the key when we think about attrition.

Hello.

Exclusive in parts and.

David Anderson: Economic, and that's really the way we approach it. It's not so much a number of.

And I think where we're targeted its exclusive with certainty over a pretty good period of time I'm not going to get into all the mechanics of the agreement, but the relationship is such that I feel confident that.

Jeff Miller: Things.

David Anderson: The way I think about attrition, and I think this is what we're really seeing in the marketplace. We, in fact, are idling things and they remain idle. They're not being bled back into the fleet to help shore up underperforming assets elsewhere for customers. And I think that is really the key when we think about attrition. So if we just look at amount of horsepower on the Simul-Frac, for example, we're fairly disciplined about that quantity. We probably won't have more than 65,000 horsepower on a location like that. If we go look at competitors performing Simul-Frac, you know, that number could be 100, 120,000 horsepower. Effectively saying that that's attrition in motion. And I think when the market, it doesn't need to recover much, if any, before we'll see real tightness in pricing in North America.

We are the partner and I've said co investing in and the work that we've done to get to where we are has all been important work and so quite confident and where that goes and so what I think.

So if we just look at amount of horsepower on the Simul-Frac, for example, we're fairly disciplined about that quantity. We probably won't have more than 65,000 horsepower on a location like that. If we go look at competitors performing Simul-Frac, you know, that number could be 100, 120,000 horsepower. Effectively saying that that's attrition in motion. And I think when the market, it doesn't need to recover much, if any, before we'll see real tightness in pricing in North America.

More important takeaway is as this is a fantastic growth opportunity for Halliburton and for both the grid.

Internationally.

Indeed, Jeff Thank you for that and if there's some dollar of spend that needs to occur in 2026 on top of the $1 billion Capex that you have related to this.

Is there a certain percentage that halliburton would be obligated to isolate a 50% obligation or anything like that you can help us. So if we see a press release from Volta that theyre spending a $1 billion and we can sort of get a sense of what that might mean for for halliburton's requirement.

Doug Becker: Got it.

Derek Podhaizer: Got it. That's helpful. This one might be for Eric. Just wanted to ask about the free cash flow here in the quarter is a little bit light versus expectations. You got a working capital headwind. Should that slip to a tailwind in Q4. Then maybe, you know, some early indications around 2026 free cash flow expectations just given where Capex is going down to $1 billion.

Operator: That's helpful.

Jeff Miller: This one might be for Eric.

Saurabh Pant: Just wanted to ask about the.

Look I think we'll be invest and we will be investing alongside them I think the capital.

David Anderson: Free cash flow here in the quarter is a little bit light versus expectations. You got a working capital headwind should.

Operator: That slip to a tailwind in Q4.

We know how to raise capital and we know how to get capital I think that these projects are.

David Anderson: Then maybe, you know, some early indications around 2026 free cash flow expectations just given where Capex is going down to $1 billion.

Imminently capitalized and so I don't see that as any kind of impediment whatsoever, if youll see them announcing capital investment around the world we're likely.

Eric Carre: Right. So as it relates to 2025, Derek, we're still shooting for about $1.7 billion for the year. Q3 was indeed a bit lower than expected. That came from higher revenue, slightly lower collection than expected, and then the cash part of the charge that we took. We're confident about the yearly numbers. Q4 is always the strongest quarter for collection, so we're not expecting that to change this year. As it relates to cash flow for 2026, it's really early to say. The big focus right now is obviously on ensuring and focusing on the strength of operation returns, et cetera. But I would say this, the cost reductions that we've undertaken, everything else being equal, will result in $400 million less cost. We have $400 million lower Capex. So in a way it's $800 million of additional liquidity as we get into 2026.

More than likely we are part of that.

Okay. Thank you so much Jeff I'll turn it back.

Thank you.

The next question comes from the line of Derek <unk> with Piper Sandler. Please go ahead.

Hey, Good morning, just wanted to go back to the theme around idling of equipment. If we can get a little bit more color maybe help us understand how many fleets that you've idled. How many you expect to be permanently impaired. How many you think might go back to work just trying to get a sense of the total market idling equipment, we've heard that from one of your peers last week.

The big focus right now is obviously on ensuring and focusing on the strength of operation returns, et cetera. But I would say this, the cost reductions that we've undertaken, everything else being equal, will result in $400 million less cost. We have $400 million lower Capex. So in a way it's $800 million of additional liquidity as we get into 2026. That being said, as we talked about the macro environment, fairly volatile. So as we think about 2026 me may take a bit more of a conservative approach as to how we utilize the cash flow, particularly as it relates to buybacks.

How significant could this accelerated attrition really be for the market and create a better setup from a supply demand perspective for 2026.

Well, let me.

Yes.

Were going to idle things that arent economic and Thats really the way we approach it is not so much a number of things.

Well the way I think about attrition and I think this is what we're really seeing in the marketplace. We in fact are idling things and they remain idle theyre not being bled back into the fleet to help shore up underperforming assets elsewhere for customers and I think that is really the key.

Eric Carre: That being said, as we talked about the macro environment, fairly volatile. So as we think about 2026.

Jeff Miller: We.

Eric Carre: May take a bit more of a conservative approach as to how we utilize the cash flow, particularly as it relates to buybacks.

When we think about attrition. So if we just look at amount of horsepower on the final Frac. For example, we're fairly disciplined about that quantity, we probably won't have more than 65000 horsepower on a location like that if we got to look at competitors performing.

David Anderson: Got it.

Derek Podhaizer: Got it. Okay. Makes sense. Appreciate the color.

Doug Becker: Okay.

Jeff Miller: Makes sense. Appreciate the color.

Operator: Turn it back. Your next question comes from the line of Stephen Gengaro with Stifel. Please go ahead.

Simultaneously that number could be 100, 120000 horsepower effectively saying that.

Doug Becker: Thanks. Good morning, everybody.

Stephen Gengaro: Thanks. Good morning, everybody.

David Anderson: Morning.

Jeff Miller: Morning.

And Thats attrition in motion and I think when the market it doesn't need to recover much if any before we'll see.

Doug Becker: I think two things for me. One is just to kind of get your views as we sort of think about 2026 a little bit. We're hearing that frac activity is below levels to sustain US production. I'm just curious kind of in your conversations and what you've heard, how you think the E and P's react to that as you go through 2026.

Stephen Gengaro: I think two things for me. One is just to kind of get your views as we sort of think about 2026 a little bit. We're hearing that frac activity is below levels to sustain US production. I'm just curious kind of in your conversations and what you've heard, how you think the E and P's react to that as you go through 2026.

<unk>.

Real tightness in pricing in North America.

Got it that's helpful and this one might be for Eric but I just wanted to ask about the free cash flow here in the quarter is a little bit light versus expectations working capital headwind should that flip to a tailwind in fourth quarter and then maybe some early indications around 2026 free cash flow expectations, just given where capex is going down to $1 billion.

David Anderson: Look, I think that each E and P is going to do what they need to do. I'm stepping back and taking a broad view, and there are some that are slowing down and some that are maybe are speeding up. But I think that overall, you know, based on our view, North America, and I don't think that I'm the only one that thinks this is the fact that North America is flattish to down a little bit next year just based on activity level and capital spend. And so, you know, I think every customer is going to do what they think they need to do. But I would say conserving capital is one of the things that they're doing.

Jeff Miller: Look, I think that each E and P is going to do what they need to do. I'm stepping back and taking a broad view, and there are some that are slowing down and some that are maybe are speeding up. But I think that overall, you know, based on our view, North America, and I don't think that I'm the only one that thinks this is the fact that North America is flattish to down a little bit next year just based on activity level and capital spend. And so, you know, I think every customer is going to do what they think they need to do. But I would say conserving capital is one of the things that they're doing.

Right so.

As it relates to 2025, Derek we're still shooting for about $1 7 billion for the year Q3 was indeed, a bit lower than expected that came from higher revenue slightly lower collection than expected and then the cash.

Cash part of the charge that we took.

Confident about their yearly number as Q4 is always the strongest quarter for collections. So we're not expecting that to change this year.

As it relates to cash flow for 2026, it is really early to say.

Big focus right now is obviously on ensuring and focusing on the strength of operation returns et cetera.

Doug Becker: Thanks. The other question I had is as it pertains to some of the growth areas you've talked about like lift and chemicals, how do you think the competitive landscape has changed? And do you think that aids in your ability to continue to gain share in those areas?

Stephen Gengaro: Thanks. The other question I had is as it pertains to some of the growth areas you've talked about like lift and chemicals, how do you think the competitive landscape has changed? And do you think that aids in your ability to continue to gain share in those areas?

But I would say it is the cost reductions that we've undertaken.

The thing is being equal.

The resulting 400 million less cost, we have 400 million lower capex. So in a way it's.

David Anderson: I do. I think that. Well, in the lift area it certainly does. And I think it's both performance and technology we've got. Intelevate is a key part of the software and AI around pumping our pumps. Artificial lift today are differentiating, and we continue to grow that business. And if you'll recall, we didn't have any international footprint to speak of. We had none when we acquired Summit. And so what we're seeing is outsized growth certainly for Halliburton. And I think ESPs broadly become a more important tool as operators, governments, and others seek to produce more oil from existing assets. So I think secular growth is in front of ESPs, and I think our unique position, both technically and from where we started, give Halliburton an outsized opportunity for growth. Great.

Jeff Miller: I do. I think that. Well, in the lift area it certainly does. And I think it's both performance and technology we've got. Intelevate is a key part of the software and AI around pumping our pumps. Artificial lift today are differentiating, and we continue to grow that business. And if you'll recall, we didn't have any international footprint to speak of. We had none when we acquired Summit. And so what we're seeing is outsized growth certainly for Halliburton. And I think ESPs broadly become a more important tool as operators, governments, and others seek to produce more oil from existing assets. So I think secular growth is in front of ESPs, and I think our unique position, both technically and from where we started, give Halliburton an outsized opportunity for growth. Great.

$800 million of additional liquidity as we get into 2026.

That being said.

As we talked about the macro environment.

Fairly volatile so as we think about 2026.

We may we may take a bit more of a conservative approach as to how we utilize the.

The cash flow, particularly as it relates to buybacks.

Let me share some progress on our international growth engines, those businesses, where we expect growth outperformance by Halliburton relative to the oilfield services market.

Got it Okay makes sense I appreciate the color I'll turn it back.

Your next question comes from the line of Stephen <unk> with Stifel. Please go ahead.

Thanks, Good morning, everybody.

Good morning.

I think two things from me.

One is just to kind of get your views as we sort of think about 'twenty six a little bit.

We're hearing that frac activity is below levels to sustain U S production and I'm, just curious kind of your conversations and what you've heard how do you think the e&ps react to that as you go through 2026.

Doug Becker: Thanks for the color.

Stephen Gengaro: Thanks for the color.

David Anderson: Thank you.

Jeff Miller: Thank you.

Operator: Your next question comes from the line of Keith Mackey with RBC Capital Markets. Please go ahead.

Keith Mackey: Hi, good morning, and thanks for taking my questions. Just wanted to start out on the CapEx guide next year. Appreciate the incremental color on free cash flow, but when it comes to CapEx, you've always messaged that we should think about it as a 5% to 6% of revenue type target. Is that still the case for next year or have things changed just given the market outlook?

Look I think that.

<unk> is going to do what they need to do I am stepping back and taking a broad view and there are.

Some that are slowing down and some that are maybe are speeding up but I think that overall.

Based on our view of North America, and I don't think that I'm. The only one that thanks. This is the fact that north.

Eric Carre: No, I think you should take the $1 billion guidance as a dollar number versus a ratio revenue. And as Jeff gave some color, we've invested a lot in a couple of really key strategic initiatives around electric frac, around the revamping of our technology for directional drilling. We continue to invest in these, but the rollout has progressed significantly. So you should be viewing this as being disciplined around our capital spend but making sure that we can still deliver on growth and on all of our strategic initiatives.

Erica is flattish to down a little bit next year, just based on activity level and capital spend.

And so.

I think every customer is going to do what they think they need to do.

But I would say conserving capital is one of the things that they're doing.

Thanks, Eric.

Question I had is as it pertains to some of the growth areas, you've talked about like lift and chemicals.

How do you think the competitive landscape has changed and do you think that AIDS in your ability to continue to gain share in those areas.

I do I think that pretty well.

The lift area.

Certainly does and I think as both performance and technology, we've got.

Keith Mackey: Got it. Appreciate the color. And just stepping back to the market. Jeff, you mentioned North America, generally the first place to come back as the cycle turns upward.

Keith Mackey: Got it. Appreciate the color. And just stepping back to the market. Jeff, you mentioned North America, generally the first place to come back as the cycle turns upward. Can you just talk to us how you're thinking a little bit more about how the drilling versus completion of that potential upswing might play out? I know some cycles it's been drilling first, then completion or vice versa. How do you see this one playing out?

Elevate is a key part of the software and AI around pumping our pumps artificial lift today are differentiating and we continue to.

Eric Carre: Can you just talk to us how?

Keith Mackey: You're thinking a little bit more about how the drilling versus completion of that potential upswing might play out? I know some cycles it's been drilling first, then completion or vice versa.

Grow that business and if youll recall, we didn't have any international footprint to speak of what had none when we acquired summit and so what we're saying is outsized growth certainly for Halliburton and I think esp's broadly become a more important tool as.

Jeff Miller: How do you see this one playing out?

David Anderson: Look, I think the supply chain in North America is much better wired together than it's ever been. So you know the idea that it's all drilling and then there are DUCs and then there's fracking, I think operators and service companies have solved for how to execute more efficiently. And so I think what you would see is rig count and frac count coming back generally together. But it's so. And the timing of that, again, less clear.

Jeff Miller: Look, I think the supply chain in North America is much better wired together than it's ever been. So you know the idea that it's all drilling and then there are DUCs and then there's fracking, I think operators and service companies have solved for how to execute more efficiently. And so I think what you would see is rig count and frac count coming back generally together. But it's so. And the timing of that, again, less clear.

As operators and governments and others seek to produce more oil from existing assets.

Secular growth is in front of ESP and I think our unique position, both technically and from where we started at Halliburton, an outsized opportunity for growth.

Great. Thanks, Thanks for the color.

Thank you.

Yes.

Your next question comes from the line of Keith Mackey with RBC capital markets. Please go ahead.

Doug Becker: Got it.

Keith Mackey: Got it. Appreciate the comments. Thank you.

Keith Mackey: Appreciate the comments.

Doug Becker: Thank you.

Operator: Thank you. And at this time, that is all that we have for questions. I will now turn the call back over to Jeff Miller, Chairman, President, and CEO for closing remarks.

Hi, good morning, and thanks for taking my questions just wanted to start out on the Capex Guide for next year I appreciate the incremental color on on free cash flow, but when it comes to Capex.

David Anderson: Okay, thank you, John. Before we wrap up today's call, let me leave you with a few thoughts. I'm excited about what's ahead for Halliburton. We have the right strategy, team, customer relationships, technology, and exciting new opportunities. Our value proposition is validated by the work we're doing today and customer discussions we're having about future work. We are focused on executing the strategies that deliver strong financial performance. I look forward to speaking with you next quarter.

Jeff Miller: Okay, thank you, John. Before we wrap up today's call, let me leave you with a few thoughts. I'm excited about what's ahead for Halliburton. We have the right strategy, team, customer relationships, technology, and exciting new opportunities. Our value proposition is validated by the work we're doing today and customer discussions we're having about future work. We are focused on executing the strategies that deliver strong financial performance. I look forward to speaking with you next quarter.

These growth engines production services artificial lift unconventional and drilling are central to our international strategy. We made solid progress this quarter and here are a few updates.

And production services, we won a major five year contract from Conocophillips in the North Sea.

To deliver this contract we will transform a conventional offshore service vessel into an advanced stimulation platform.

<unk> with the first deployment of okta automation to an offshore environment.

You've always.

Message that we should think about it as a 5% to 6% of revenue type target.

This demonstrates our leading technology and execution that maximize asset value for our customers.

And artificial lift.

Oil company named Halliburton service partner of the year and awarded Halliburton, a multi year ESP contract, which further strengthens our position in Kuwait.

Additionally, in Colombia Echo patrol awarded Halliburton, ESB contracts and nine of 11 fields.

Is that still the case for for next year or have things changed just given given the market outlook.

And international lung Conventionals, we saw further adoption of our leading completions technology and set a new continuous pumping record in novato Marta.

No I think you should take the $1 billion guidance as a dollar number versus a ratio to revenue and as Jeff gave some color.

I am encouraged by our technology penetration in this market as we deliver leading performance and maximize asset value.

And finally in drilling we introduced I cruise force in the UAE and Qatar with strong results in both markets I.

Hi, cruise force maximizes rate of penetration, while utilizing advanced formation evaluation tools delivering significant value for logging requirements and rig costs are high.

We see this most clearly in deepwater during.

During the quarter I met with customers in Latin America, and Europe to recognize the performance we've achieved through our collaborative model.

Together, we are reducing drilling times, and proving well placement and deepening our collective competitive advantage.

We've invested a lot in a couple of really key strategic initiatives around.

Offshore is roughly half our revenue outside of North America land today, and I expect that share to grow.

I am confident in the future of our international business.

Operator: This concludes today's conference call. We would like to thank you for your participation. You may now disconnect your lines. Have a pleasant day.

Now, let's turn to North America.

Our third quarter revenue of $2 4 billion was above our expectations with 5% sequential growth driven by less than anticipated completions white space and strong activity in the Gulf of America.

During the quarter, we executed our strategy to maximize value in North America.

Pre crack around the revamping of our technology for directional drilling we continue to invest in these but the rollout has progressed significantly. So we don't need to use the same amount of capital dollars.

Stacked on economic Frac fleets expanded our leading automation offerings and executed cost out initiatives to reduce our operating costs and overhead.

Looking to the fourth quarter, we expect greater than typical white space and seasonal activity slowdowns to result in approximately 12% to 13% lower sequential revenue.

Despite softer activity in the near term technology demand remained strong across both divisions as our customers are focused on maximizing the value of their capital dollars.

We also see strong demand for our Zeus IQ closed loop fracturing offering.

We expect meaningful growth of this service in 2025, and 2026 deepening our competitive advantage and reinforcing our leadership in fracturing technology efficiency and execution.

And drilling services, we delivered solid sequential and year on year growth driven by I crews.

In the third quarter, we introduced the seven and 700 <unk> I cruise CX.

Highly sought after hole size for the Permian basin with outstanding results.

The system completes curve and lateral sections in a single run replicating the proven success, we've achieved in other hole sizes.

This new offering broadens the cruise product portfolio and given the systems consistent performance and our advances and telemetry automation and rig integration I am confident we will see rapid adoption by our customers and continued growth in our North America drilling services business.

To close.

Rose.

North America is a tough market today.

We are taking steps and executing our strategy to maximize value. This means we are prioritizing returns technology leadership and working with leading operators.

In these two strategic initiatives. So you should be viewing this as being disciplined around our capital spend making sure that we can still deliver on growth and on all of our strategic initiatives.

I'm confident that our strategy execution, we will drive further success.

Now, let me address our investment in both the grid.

As disclosed in our form 8-K filed on October 14th.

<unk> owns approximately 20% of Volta grid on a fully diluted basis.

We invested early and increased our ownership over time, because distributed power is a critical enabler for electrified oilfield services and a growing opportunity set beyond the oilfield.

Last week <unk>.

<unk> announced an agreement to deploy two three gigawatts of generation capacity to support Oracle's next generation artificial intelligence data centers.

Through this agreement, we will combine halliburton's global reach design manufacturing and operating capabilities with Volta grids distributed power expertise to deliver reliable power at scale.

I expect this will be an important long term growth opportunity for both bolt the grid and Halliburton.

Looking ahead I am excited by the opportunities for Halliburton and voltage grid.

Before I turn the call over to Eric Let me close with this.

Oil price volatility is likely to impact the near term macro environment, while I firmly believe a recovery in activity is inevitable the timing and shape remain uncertain.

Near term, we will execute our collaborative strategy and advance our technology.

Got it appreciate the color.

We invest in our international growth engines.

Maintained cost and capital discipline, including idling equipment when returns are not economic and finally, we remain focused on returning cash to shareholders.

I am excited about Halliburton, our strategy, our team our customer relationships and our technology.

And just stepping back to the market, Jeff You mentioned North America generally the first place to come back in as the cycle turns upward can you just talk us talk to us how youre thinking a little bit more about how the drilling versus completion of that potential upswing might play out and there was some cycles, it's been drilling <unk>.

Our portfolio is highly differentiated.

We lead in critical product lines, both on and offshore.

Our value proposition is validated by the work we are doing today and the customer discussions we are having about future work.

And finally, our leadership team is focused on executing the strategies that deliver strong financial performance.

That I will turn the call over to Eric.

Thank you, Jeff and good morning, our Q3 reported net income per diluted share was <unk>.

Adjusted net income per diluted share was <unk> 58.

Let me start with some color on the charges taken this quarter.

All the details are available in the press release, but a few items are worth highlighting.

First to address near term market conditions, we took steps to reset our cost structure.

Second because of the changes to U S tax flows we recorded an additional valuation allowance expense of $125 million as a.

<unk> of these changes we also expect a lower effective tax rate on our U S taxable income going forward.

Now turning to operations.

Total company revenue for Q3, 2025 was five 6 billion.

An increase of 2% when compared to Q2 2025.

Adjusted operating income was $748 million and adjusted operating margin was 13%.

Our Q3 cash flow from operations was $488 million and free cash flow was $276 million.

During Q3, we repurchased.

Okay.

Then completion or vice versa, how do you see this one playing out.

Okay.

Hum.

Common stock.

Now turning to the segment results beginning.

Beginning with our completion and production Division revenue in Q3 was $3 2 billion, an increase of 2% when compared to Q2 2025.

Look I think the supply chain in North America is much better wired together than it's ever been so.

Operating income was $514 million flat when compared to Q2 2025, and operating income margin was 16% increased.

In our drilling and evaluation Division revenue in Q3 was $2 4 billion.

An increase of 2% when compared to Q2 2025 operating.

Income was $348 million, an increase of 12% sequentially and operating income margin was 15%.

The idea that it's all drilling and then their ducks, and then Theres fracking I think operators and service companies.

Partially offsetting these increases were lower activity across multiple product service lines in the middle East.

Now, let's move on to geographic results.

Our Q3 international revenue was flat when compared to Q2 2025.

Europe Africa revenue in Q3 was $828 million flat sequentially.

Improved completion tool sales in Norway.

And increased drilling related services in Namibia, where.

Offset by lower completion tool sales in the Caspian area and lower fluid services across Europe.

Middle East Asia revenue in Q3 was $1 4 billion.

Solve for how to execute more efficiently and so I think what you would see us rig count and Frac count coming back generally together.

Yeah.

Okay.

Sequentially, primarily driven by lower activity across multiple product service lines in Saudi Arabia.

Latin America revenue in Q3 was $996 million.

A 2% increase sequentially.

This increase was primarily driven by higher project management activity across the region and increased drilling services in Argentina.

In North America, Q3 revenue was $2 4, billion% to 5% increase sequentially.

This increase was primarily driven by improved stimulation activity in U S land in Canada, and higher completion tool sales and increased wireline activity in the Gulf of America move.

Moving on to other items in Q3, our corporate and other expense was $64 million we.

Our Q4 corporate expenses to increase about $5 million.

In Q3, we spent $50 million on this Aps for migration, which included milestone payments and is included in our results for Q4, we expect <unk> expenses to be about $40 million.

So and the timing of that again less clear.

Net interest expense for the quarter was $88 million for Q4, we expect net interest expense to increase about $5 million.

Our normalized effective tax rate for Q3 was 21, 5% based on our anticipated geographic earnings mix, we expect our Q4 effective tax rate to be approximately flat.

Capital expenditures for Q3 were $261 million for the full year two.

2025.

Got it I appreciate the comments thank you.

We expect.

Expenditures to be about 6% of revenue.

In Q3 tariffs impacted our business by $31 million.

For Q4, we currently expect a gross impact of about $60 million increasing quarter on quarter due to section 203 to tariffs. These.

These impacts are included in our guidance now let me provide you with comments on our Q4 expectations.

Thank you and at this time that is all that we have for questions I will now turn the call back over to Jeff Miller, Chairman, President and CEO for closing remarks.

In our completion and production division, we expect greater than typical white space and seasonality in North America, partially offset by strong international results into fourth quarter.

As a result in our completion and production division, we anticipate sequential revenue to decrease 4% to 6% and margins to be down 25% to 75 basis points.

In our drilling and evaluation division, we expect sequential revenue to be flat to down 2% and margins to increase 50 to 100 basis points I will now turn the call back to Jeff.

Thanks, Eric.

Let me summarize the key takeaways from today's discussion.

Halliburton delivered solid Q3 results with $5 $6 billion in revenue we.

We took steps that will deliver estimated savings of $100 million per quarter reset, our 2026 capital budget and idled equipment that no longer meets our return expectations.

Our international growth engines production services artificial lift unconventional and drilling are performing well.

In North America, Halliburton is executing its strategy to maximize value.

Zeus electric fleets now make up over half of our active fleet and I cruise CX is driving performance in key basins like the Permian reinforcing our technology differentiation.

Okay. Thank you John and before we wrap up today's call. Let me leave you with a few thoughts.

All of this caliber.

Calibers and bolter grid agreed to launch an exciting new opportunity for international growth and data centers.

And finally, we are committed to returning cash to shareholders, maintaining costs and capital discipline and investing in differentiated technologies that drive long term performance.

And now let's open it up for questions.

We climbed the ask everyone to limit themselves to one question and one follow up.

I'm excited about what's ahead for Halliburton, we have the right strategy team customer relationships technology and exciting new opportunity.

Your first question comes from the line of Arun <unk> with Jpmorgan. Please go ahead.

Good morning, Jeff and Eric.

Gentlemen, good morning.

Morning, Joe.

Gentlemen, you described how your relationship with Volta grid gives you a front seat to the emerging distributed power generation market I was wondering if you could talk about.

Your views on the evolution of that market over the last 369 months.

And maybe talk a little bit about the strategic collaboration you announced last night.

Which I believe allows you to invest in project level economics internationally, but maybe you could provide a little bit more detail around that.

Yeah, certainly look the.

Demand for power and for AI is like nothing I've ever seen in terms of demand growth and that we've watched that.

<unk> proposition is validated by the work we're doing today and customer discussions we're having about future work, we're focused on executing the strategies that deliver strong financial performance.

And we also know that not only in the U S, but around the world. The rest of the World is a really big opportunity set for the same level of growth and.

As we look ahead to what we've announced with both the grid and this is where halliburton invest in project economics. So we are we are sharing the economic value of projects.

Together.

And also it's an opportunity to.

<unk> leverage what we do really well and.

From a halliburton perspective, we've got boots on the ground in 70 countries, we've got excellent execution skills.

Proven manufacturing and we also have.

Global scale industrial global scale, which I think is critical.

At the same time, both the great. It has solved for.

How to execute these projects technically and at scale.

And we've built a strong relationship over five years is that technology is developed.

Worked closely with both the grid in our own business.

Forward to speaking with you next quarter.

And that gives us a great deal of confidence and how they've gone about solving the technical.

Requirements for data centers, and we're just super excited to be part of the.

This whole venture going forward.

Great and just maybe my follow up.

This concludes today's conference call, who would like to thank you for your participation. You may now disconnect your lines have a pleasant day.

North American revenue was up 5% sequentially a lot better than we had expected that maybe you had guided to relatively flat on a year over year basis can you talk about some of the drivers of the outperformance in North America and thoughts on what this could mean for 2026.

Well look we saw less white space than we expected in Q3.

Obviously drove revenues.

Better than what we would have thought.

And I think it also gets to the strength of the customers that we work with.

The solid programs that they have.

As I look towards 2026, it gives me a lot of confidence in halliburton's.

Positioning in the market both.

How we execute and maybe even more importantly, the technology that we're bringing to market and as we described but couple of things.

These fleets to work and.

Demand for not only the electric fleet, which is a fantastic piece of equipment, but maybe even more so Zeus IQ in terms of what that means to us.

Solving for AUR.

Great. Thanks, Jeff.

Thank you.

Your next.

Question comes from the line of Neil Mehta with Goldman Sachs. Please go ahead.

Hey, Jeff and team.

I wanted to spend more time talking about the middle east opportunity as it relates to power it.

Specifically is that the region, you think makes us to be spending time on and talk about some of the constraints that might exist in the middle East in terms of really scaling the AI opportunity set.

And how do you intend to Debottleneck.

Look I think that.

It's the middle East and rest of World I think our initial focus middle East, we see a lot of opportunity. There obviously, that's an economy that is.

Developing capabilities.

Every single day and they are very much focused on looking forward to investment.

And so.

Yes.

The other thing is there is.

Sure.

Certainly a lot of available energy in the Middle East and there is also a lot of capital in the middle East and so.

Those things all conspire to make that very attractive.

Great and then Kevin I know, it's too early to talk about 26 at this point and we'll get more color on the fourth quarter call, but just as you look at what is still a very uncertain macro for for North America. In particular, just any early thoughts and helping us think through.

The picture for 'twenty six.

Based on early Investor.

Early customer conversations.

Yes look it is really early customers avid produced budgets yet at this point.

We clearly are having discussions with customers.

Back in say 2006 as overall.

Flattish with some bright spots is how I would describe all of 26.

North America, we did stack some fleets in the quarter.

Those probably don't come back to work, but here's what's more important to think about for 2006 in my view and it's going to be looking at the Mileposts as we go through 'twenty six because I think some important things are happening now.

Number one OPEC plus barrels are getting into the market we know that.

North America and my view is.

Probably below maintenance level spend.

And so and then Mexico stays kind of probably where it is for a little while but that decline in production. There is also meaningful so if we think about Mexico declining.

North America likely rolling over and all of the OPEC plus spare capacity in the market.

Creates real tightness that sort of undisputable tightness in the market that.

I think the snapback will be super strong for us.

Alright, Alright, we'll stay tuned as we have more investor customer conversation. Thanks, Jeff.

Yes.

Your next question comes from the line of David Anderson with Barclays. Please go ahead.

Hey, good morning.

I had a question about the margins, which are quite a bit stronger than we were expecting this quarter, you talked about taking $100 million of cost out per quarter I'm not sure that within this current quarter I'm, just kind of curious as to how much it impacted.

<unk>.

Yes, let me give you some color Dave on the on the Q3 margin versus guidance. So.

The first thing we had about half of the beat came from reductions in labor cost that actually we realize savings earlier than expected as our operation teams moved pretty quickly to get.

Things done.

Then in terms of what came out of operation between <unk> as Jeff just mentioned very very low.

Less white space in North America, and strong performance from the Gulf of America team and then overall just a strong international performance, primarily from our completion tool and cementing business and on the <unk> side.

The strong result came from our.

Project management business in Latin America.

Okay. Thank you suggest I know I'm asking a follow up question here. So welcome.

Partnership here.

There is about a couple of things obviously, we know both are good it's breaking the power.

Maybe if you could just started simplify for us what how is bringing to the table here.

Then sort of secondarily, what first projects that we were talking about here are both agreed to send out a bit to three gigawatt project are you talking about that size or are you talking more like 100, 200 400 of that kind of range and just kind of model both Otis and there what kind of timeline are we talking here are we talking like 2028.

I wonder if the supply chain tightness and how that all lines up thanks.

Well, let me start with.

Maybe the last question from a supply chain standpoint, both the grant is in a fantastic position from a supply chain standpoint, and comfortable with where they are from a size of the project. Yes, we're aligned with Volta Grande around projects of the size and scale that they are talking about and so I think.

Yes.

Not going to forecast size of projects, but I feel comfortable they can be pretty big.

And then.

What does halliburton bring in I think Halliburton brings some very important things.

Particularly I would say industrial scale and working internationally.

All seen how difficult that can be for companies as they scale internationally, we've seen a lot of them.

Lesson as successful as they scale and.

But it's on the ground managing projects investing in projects customer relationships. There is a long list of things that Halliburton brings to the international markets.

We are clearly can be additive and then from a bolt the grid perspective clear on what they're doing.

Great. Thanks, Jeff I appreciate it.

Thank you.

Your next question comes from the line of Sarah <unk>.

With Bank of America. Please go ahead.

Hi, good morning <unk>.

Good morning, good morning.

Oh, Jeff maybe I'll continue with that line of questioning on the follow up front.

But we've had a little bit on the Capex side of things because this business is pretty capex intensive not something that you are not used to date there Jeff over the past, but how do you think about that how do you think you will fund that.

But the auto grade level, but how does the collaboration outside the U S right to the Middle East like you are targeting right now how does that look like from a from a funding from a capex standpoint.

So to be to be clear about how we're thinking about it is.

So our Capex budget for next year is 1 billion whatever we do around power with Walter grid into international market is not included in that $1 billion.

Okay. Okay I got it no that's helpful hub and then one for the not the medical market right like somebody noted on the call. Our performance has been a lot better than a lot of us were thinking it seems like just correct me if I'm wrong. It seems like you are not trying to be everything to everybody youre targeting the customers.

Sophisticated customers that value, what we bring to the table, but just maybe talk to that a little bit how are you targeting the north American market with the aim of maximizing value like you've been trying to do it.

Well look maximizing value means that we are focused on efficiency and technology and.

Electric fleets bring that but we continue to invest in technology in North America, and I think that's where the.

Point of bifurcation happens and we have been.

Clearly targeting customers that want to use that technology, both the electric and stepping forward into the subsurface and the control of sand and a lot of the things that Zeus IQ and the many things that we built along the way allow customers to do and we continue to deepen that competitive advantage.

In terms of how we help customers solve for EUR sand control measure sand performance all of those things and the subsurface and so very deliberate.

We don't compete in the spot market, we don't want to be competing in the spot market.

Yes, you've seen the stack some diesel dual fuel fleets in the quarter for that very reason.

Yes, clearly we are not going to be everything to everyone.

We are.

Very pleased with the technology performance and pleased with the uptake on the technology. So there's really not a good reason.

Continue to burn up until.

Still feel equipment in a market thats not making the returns we have opportunities to us and they'll fill equipment overseas, which we may do we probably will do or we just idle and wait for later when things get tighter and we put them back to work then.

Makes sense makes sense, okay, yes, I've done it back and by the way as much as I like the $100 million in cost savings on the waiting for the day when activity is going up and we are adding labor cost, but then thank.

Thanks, a lot for the color.

Alright, thank you.

Your next question comes from the line of James West with Melius Research. Please go ahead.

Hey, good morning, Jeff Eric.

Alright, good morning, James.

So would it be.

Guys have been dancing room.

Both are good relationship with your questions. So far but I was hoping to just create some clarity here.

We obviously know they have a distributed power.

Hey, guys can I do business.

Correct and Thats, what Ive described global industrial scale, including customer relationships market knowledge of markets history and markets in history of execution in markets.

That is well respected by.

Most of the people in those markets clearly by the people in those markets customers and governments and all the rest.

Exactly that's what that's what that's exactly what we see.

And then maybe on if we think about 'twenty six and I know.

Your customers are kind of alluding or telling you at this point.

Yes, I mean, our deepwater business is getting traction now and continues to strengthen as projects start and as we win projects. So thats sort of the view of that into 26 and beyond.

Yes.

Middle East Saudi in particular.

I expect that picks up as we go into next year now I don't think that it springs back to maybe where it was but not declining as a form of improving and I think there will be some improvement on top of that as we go into 2020 middle of 2026, and so yeah look the international business looks solid our technical position.

Internationally looks very solid in terms of the growth engines I described the contract wins, we're having and really our value proposition is just continues to.

Gain traction with customers all around the world, So very happy with that.

Got it great. Thanks, Jeff.

Thank you.

Your next question comes from the line of Dawn Becker with capital one. Please go ahead.

Good Segway, Jeff you've been highlighting the growth engines earlier. This year you talked about those engines could add two and a half maybe $3 billion of annual revenue three to five years.

How do you think <unk> progressing relative to those targets and I assume you feel pretty comfortable that halliburton should be growing outgrowing the industry internationally given those growth engines.

Yes. They are on track to do what we described I pointed out a few of the anecdotes around the progress, but the progress is really deep rooted in our value proposition and so these are strategic.

Opportunities continue to gain traction globally, whether intervention.

You've seen the acquisition of uptime, which is playing a more and more meaningful role I know, we've just I think there was a press release, just last night or yesterday around application of that in the north sea with Aker BP, but that continues to.

<unk> gained traction really in all deepwater markets I'm very excited about that.

Artificial lift continues to gain traction throughout the middle East Latin America. So that's very much on track drilling technology continues to advance.

Nation drilling dunson, just amazing work in terms of automated drilling controlling.

Controlling our automating not only the rig, but the hydraulics, which is key.

Key technical differentiator for Halliburton.

And then in unconventional is continue to look.

<unk> applied the technology sensory and continuous pumping and Argentina.

Those are market first they're they have an impact.

A positive impact for customers and for Halliburton.

The middle East the same way and we see a lot of opportunity, even Australia, where we've done quite a bit of work in international unconventional so.

Very much on track and Super excited about the differential growth opportunity that Halliburton has in these areas.

Well, it's definitely sounds encouraging wanted to touch base on Brazil, specifically Halliburton recently received a completion and stimulation contract.

I expected to start next year, we've been hearing some of the offshore drilling contractors have been having one on one discussions with Petrobras about reducing costs.

What's your outlook for Brazil, and Halliburton was approached about helping to reduce costs.

Look we're super positive about Brazil, we've got a strong position there both with IOC work and with Petrobras.

Again continue to develop technology specific for that market, where in all sorts of discussions with <unk>.

Look no in terms of the market in Brazil, we see growth and execution and technology uptake given the complexity of that deepwater market.

Got it thank you Jeff.

Okay.

Your next question comes from the line of Scott Gruber with Citigroup. Please go ahead.

Yes, good morning.

Good morning, Scott.

Good morning.

You guys have taken a very disciplined approach with respect to idling Frac crews, where you will make a reasonable return.

Curious.

Where do you stand in that process.

More weighted to <unk> or <unk> or with idling be more weighted to <unk> with customers slow down I'm, just trying to think through where your market comments on North America being down 12, 13% and trying to separate.

Your line market from from the idling trend.

Look I think that we will.

Some crews probably later in the quarter.

May see some of that in Q4, I think the the idling and the white space in some respects go together however.

Yes.

Those crews that have been retired or not retired but idle will stay idle until we see margins snapped back on them.

But I think whats.

And as we look at the.

The mile posts that I described is that the first thing.

Snapped back or recover will be North America, and it's been that way for a decade and a half.

And we've seen that through several downturns.

And so we fully expect that the recovery will come quickly in North America. When it comes and we're going to want those fleets available to fill in gaps and actually take on some bigger work.

So I appreciate the color.

And then turning to the Capex budget for next year.

The $1 billion, it's a bit below where expectations were.

Let's say part of your Frac maintenance Capex should be coming down a lot with the idling and investment needs. Greg can you discuss kind of within the budget your ability to continue to make the strategic investments the <unk> toolkit and your growth verticals within CMP. It seems like those investments.

The board a lot of fruit here in terms of share gains.

To talk through the moving pieces in the budget next year.

Your ability to still make those strategic investments.

Look let me start with the capital budget, the 30% reduction is still in line I think largely.

But it's.

Look.

And as you described investment cycles.

We just view it as we know and that's where we need to be from a strategic perspective, we continue to invest in R&D. We continue to invest in the technology. That's differentiating we have quite a bit of that but we also have the ability to manage that inside of the budget that we have and I think then driving some tightness and equipment is.

Good thing and I expect that.

<unk>.

Yes, Youll continue to see Halliburton investing in the technology that makes the outsized market returns.

I guess another way to phrase. It is do you think you can still deliver the fair share gains indeed.

Indiana.

With the $1 billion budgets next year.

Unequivocally yes.

Alright I appreciate it thank you.

Thank you.

Your next question comes from the line of Marc Bianchi with TD Cowen. Please go ahead.

Okay. Thank you.

I wanted to pivot back to some some stuff on Volta.

The.

That was announced last night. This international collaboration is that an exclusive arrangement, where halliburton is sort of exclusively.

Deploying the Volta.

Technology or can they go work with someone else if they choose to.

Well look it's exclusive in parts and.

And I think where we're targeted its exclusive with certainty over a pretty good period of time.

I'm not going to get into all the mechanics of the agreement, but the relationship is such that I feel confident that.

We are the partner and I've said co investing in and the work that we've done to get to where we are has all been important work and so quite confident and where that goes and so what I think of the <unk>.

More important takeaway is as this is a fantastic growth opportunity for Halliburton and for both the grid.

Internationally.

Indeed, Jeff. Thank you for that and if there is some dollar of spend that needs to occur in 2026 on top of the $1 billion Capex that you have related to this.

Is there a certain percentage that halliburton would be obligated to is it a 50% obligation or anything like that you can help us. So if we see a press release from Walter that Theyre spending a $1 billion and we can sort of get a sense of what that might mean for for halliburton's requirement.

Look I think we will be investing and we will be investing alongside them I think the capital.

We know how to raise capital and we know how to get capital I think that these projects are.

Imminently capitalized <unk> and so I don't see that as any kind of impediment whatsoever, and if youll see them announcing capital investment around the world we're likely.

More than likely we are part of that.

Okay. Thank you so much Jeff I'll turn it back.

Thank you.

The next question comes from the line of Derek <unk> with Piper Sandler. Please go ahead.

Hey, Good morning, just wanted to go back to the theme around idling equipment. If we can get a little bit more color maybe help us understand how many fleets that you've idled. How many you expect to be permanently impaired. How many you think might go back to work just trying to get a sense of the total market idling equipment, we've heard that from one of your peers last week.

And how significant could this accelerated attrition really be for the market and create a better setup from a supply and demand perspective for 2026.

Well, let me.

Yes.

Were going to idle things that arent economic and Thats really the way we approach it is not so much a number of things.

One way I think about attrition and I think this is what we're really seeing in the marketplace. We in fact are idling things and they remain idle theyre not being bled back into the fleet to help shore up underperforming assets elsewhere for customers and I think that is really the key.

Simultaneously that number could be 100, 120000 horsepower effectively saying that.

And thats attrition in motion.

Thank for the market it doesn't need to recover much if any before we'll see.

Real tightness in pricing in North America.

Got it that's helpful and this one might be for Eric but I just wanted to ask about the free cash flow during the quarter is a little bit light versus expectations working capital headwind, how should that flip to a tailwind in the fourth quarter and then maybe some early indications around 2026 free cash flow expectations, just given where capex is going down to $1 billion.

Right so.

As it relates to 2025, Derek we're still shooting for about $1 7 billion for the year Q3 was indeed a bit low.

We are then expected that came from higher revenue slightly lower collection than expected and then the.

Cash part of the charge that we took.

Confident about there you're already number as Q4 is always the strongest quarter for collections. So we're not expecting that to change this year.

As it relates to cash flow for 2026. It is really early to say the big focus right now is obviously on ensuring and focusing on the strength of operation returns et cetera, but.

But I would say it is the cost reductions that we've undertaken.

The thing is being equal.

Result in 400 million less cost, we have 400 million lower capex. So in a way it's.

$800 million resolve additional liquidity as we get into 2026.

That being said.

As we talked about the macro environment.

Fairly volatile so as we think about 2026.

We may we may take a bit more of a conservative approach as to how we utilize the.

The cash flow, particularly as it relates to do buybacks.

Got it Okay makes sense I appreciate the color I'll turn it back.

Your next question comes from the line of Stephen <unk> with Stifel. Please go ahead.

Thanks, Good morning, everybody.

Good morning.

I think two things from me.

One is just to kind of get your views as we sort of think about 'twenty six a little bit.

Look I think that <unk>.

<unk> is going to do what they need to do I am stepping back and taking a broad view and there are <unk>.

Some that are slowing down and some that are maybe are speeding up but I think that overall.

Based on our view North America, and I don't think that I'm. The only one that thanks. This is the fact that North America is flattish to down a little bit next year, just based on activity level and capital spend.

And so I think every customer is going to do what they think they need to do.

But I would say conserving capital is one of the things that they're doing.

Thanks.

The other question I had is as it pertains to some of the growth areas, you've talked about like lift and chemicals.

How do you think.

Competitive landscape has changed and do you think that AIDS and your ability to continue to gain share in those areas.

I do I think that pretty well.

And the lift area.

Certainly does and I think as both performance and technology, we've got.

<unk> is a key part of the software nai around pumping our pumps artificial lift today are differentiating and we continue to grow.

So that business and if youll recall, we didn't have any international footprint to speak of what had none when we acquired summit and so what we're saying is outsized growth certainly for Halliburton and I think esp's broadly become a more important tool as.

As operators and governments and others seek to produce more oil from existing assets.

Secular growth is in front of ESP and I think our unique position, both technically and from where we started at Halliburton, an outsized opportunity for growth.

Great. Thanks, Thanks for the color.

Thank you.

Your next question comes from the line of Keith Mackey with RBC capital markets. Please go ahead.

Hi, good morning, and thanks for taking my questions just wanted to start out on the Capex Guide for next year I appreciate the incremental color on on free cash flow, but when it comes to Capex.

You've always messaged that we should think about it as a 5% to 6% of revenue type target.

Is that still the case for for next year or have things changed just given given the market outlook.

No I think you should take the $1 billion guidance as a dollar number versus a ratio to revenue and as Jeff gave some color.

We've invested a lot in a couple of really key strategic initiatives around.

Pre crack around the revamping of our technology for directional drilling we continue to invest in these but the rollout as progress significantly. So we don't need to use the same amount of capital dollars.

In these two strategic initiatives. So you should be viewing this as being disciplined around our capital spend but making sure that we can still deliver on growth and on all of our strategic initiatives.

Got it appreciate the color.

And just stepping back to the market, Jeff You mentioned North America generally the first place to come back in as the cycle turns upward can you just talk talk to us how youre thinking a little bit more about how the drilling versus completion of that potential upswing might play out and there was some cycles, it's been drilling <unk>.

Then completion or vice versa, how do you see this one playing out.

Look I think the supply chain in North America is much better wired together than it's ever been so.

The idea that it's all drilling and then their ducks, and then Theres fracking I think operators and service companies.

Saul for how to execute more efficiently and so I think what you would see us rig count and Frac count coming back generally together.

So and the timing of that again less clear.

Got it I appreciate the comments thank you.

Thank you and at this time that is all that we have for questions I will now turn the call back over to Jeff Miller, Chairman, President and CEO for closing remarks.

Okay. Thank you John and before we wrap up today's call. Let me leave you with a few thoughts.

I am excited about what's ahead for Halliburton, we have the right strategy team customer relationships technology and exciting new opportunity.

Your proposition is validated by the work we're doing today and customer discussions we're having about future work. We are focused on executing the strategies that deliver strong financial performance.

Look forward to speaking with you next quarter.

This concludes today's conference call, we would like to thank you for your participation. You may now disconnect your lines have a pleasant day.

Q3 2025 Halliburton Co Earnings Call

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