Helmerich & Payne Q3 Earnings Call Highlights

Helmerich & Payne exceeded fiscal Q3 2026 guidance across all three segments, with revenue above $1 billion, adjusted EBITDA of $236 million and free cash flow of $98 million. North American drilling strengthened: the company reactivated 10 rigs, exited the quarter with 147 Lower 48 rigs working and raised full-year rig-count guidance; super-spec utilization reached 95%. Deleveraging and cost reduction remain priorities. H&P repaid its $400 million term loan early, targets $40 million in annual corporate-cost savings by 2027 and plans more than $160 million in asset sales while maintaining its dividend.

Helmerich & Payne reported fiscal third-quarter 2026 results that exceeded the midpoint of its guidance across all three operating segments, supported by a rebound in U.S. drilling activity, stronger Latin American performance and performance-related bonuses in its offshore business. Adjusted EBITDA totaled $236 million for the quarter, while revenue exceeded $1 billion, up 11% sequentially. The company generated $98 million in free cash flow and reported net income of $0.74 per diluted share. Excluding the gain on the sale of Utica Square and other select items, Helmerich & Payne recorded a loss of $0.11 per share, CFO Todd Scruggs said.

North America Solutions was a key contributor during the quarter. The segment averaged 142 contracted rigs and generated direct margin of $241 million, reaching the high end of company guidance. Direct margin averaged $18,700 per day, up more than $1,000 per day sequentially. The company reactivated 10 rigs during the quarter and exited the period with 147 rigs working in the Lower 48. Adams said private and smaller independent operators accounted for most recent rig additions, while larger operators have generally focused on adding contract term and technology to existing rigs. Helmerich & Payne said super-spec fleet utilization is trending at 95%, which management believes could support further market tightening and direct-margin improvement. The company has roughly 10 additional rigs that could be returned to work relatively quickly at maintenance-capital levels or less, although some could be deployed outside the Lower 48. For the fiscal fourth quarter, the company expects North America Solutions to operate 145 to 151 rigs and generate direct margin of $245 million to $255 million. It raised full-year North American rig-count guidance to a range of 140 to 144 rigs. Management said the second Flex Robotics package has been deployed to a rig for a supermajor customer in the Permian Basin. Mike Lennox, executive vice president of the Western Hemisphere, said the first robotic rig has performed above the company’s initial P50 expectation and is currently the customer’s top-performing rig in a fleet of rigs in the high 20s. Helmerich & Payne expects to have five robotic rigs deployed by February.

International Solutions produced $31 million in direct margin during the quarter, also at the high end of guidance. The result benefited from Latin American operations and a lower-than-expected impact from Middle East disruption as travel routes and logistics incrementally improv...