Weatherford International (NASDAQ:WFRD) executives highlighted sequential revenue growth, improved profitability, and stronger cash generation in the company’s fourth-quarter and full-year 2025 earnings call, while also laying out an outlook for 2026 that management described as a “tale of two halves.”
Fourth-quarter performance and regional trends
President and CEO Girish Saligram said Weatherford delivered 5% sequential revenue growth in Q4 2025, alongside operating income that was higher both sequentially and year-over-year. He added that adjusted EBITDA margins were “well above 22%,” with fourth-quarter adjusted EBITDA margin reported at 22.6%, up 74 basis points sequentially.
In the Middle East, North Africa and Asia region, Weatherford reported 4% sequential growth led by Kuwait, Oman, the UAE, and Indonesia. Saligram said activity in Saudi Arabia remained muted, though the company is “hopeful of a healthy recovery in the back half of 2026.”
Mexico stabilization and cash collections
Management revisited the sharp downturn in Mexico during 2025, noting that full-year Mexico revenues declined “a little over 50%” versus the prior year. Saligram said the company believes “the worst in Mexico is behind us” and described the situation as stabilized, pointing to steady activity levels and the resumption of payments in the second half of 2025.
Fourth-quarter adjusted free cash flow was $222 million, which Saligram said was “significantly enhanced” by collections from a key customer in Mexico, including payments for 2025 operations and some older receivables. CFO Anuj Dhruv added that the collections were larger than originally expected for 2025, with some previously anticipated in 2026, and said recent payment trends have become “more consistent.”
For the full year 2025, Weatherford reported adjusted free cash flow of $466 million, representing a 43.7% conversion ratio, which Saligram said was a 576-basis-point improvement over 2024 and exceeded the company’s initial expectation for modest improvement. Dhruv said Mexico receivables impacted working capital efficiency in 2025, with net working capital at 28.9% of revenue versus 24.5% in 2024, though he expects improvement as pending collections materialize. He reiterated an internal goal of 25% or better.
On the Q&A portion of the call, Saligram said Mexico had shown three consecutive quarters of sequential improvement and that management expects stability to translate into “a slight degree of growth” year-over-year in 2026, though not a dramatic increase. He also noted Weatherford is expanding activity beyond a single large customer, pointing to awards tied to the Trion deepwater development.
Cost actions, capital spending, and shareholder returns
Dhruv said the company continued to execute cost improvement actions and recorded an additional $7 million restructuring and severance charge in Q4, bringing total 2025 charges to $58 million. He said cost actions were designed to right-size the cost structure—covering headcount, real estate, and supply chain footprint—while also improving productivity through shared services, digital platforms, and artificial intelligence.
In another discussion of costs, Dhruv said Weatherford reduced its workforce by “around 2,000 plus” in 2025, describing it as part of moving quickly to avoid margin degradation in a softer market environment.
Capital spending in Q4 was $51 million, with full-year 2025 CapEx of $226 million, or 4.6% of revenue. For 2026, Weatherford guided CapEx to a range of $190 million to $230 million, with Dhruv noting the midpoint is expected to decline versus 2025. He said the 2026 CapEx mix will shift, with lower spending on service tools in line with market activity, but higher IT-related spending tied to the company’s ERP program.
Weatherford also emphasized capital returns and balance sheet progress. Saligram said the board approved a 10% dividend increase, which he framed as reflecting confidence in the company’s long-term prospects. Dhruv reported that in 2025 Weatherford returned $173 million to shareholders—$72 million in dividends and $101 million in share repurchases—representing roughly 37% of annual adjusted free cash flow. He said the company remains committed to returning approximately 50% of adjusted free cash flow over the cycle.
Dhruv said Weatherford strengthened its balance sheet during 2025 by reducing gross debt by $161 million, upsizing its revolving credit facility to $1 billion, and refinancing at what he called attractive interest rates. He reported net leverage of about 0.42 times and total liquidity of $1.6 billion, including roughly $1 billion of cash and restricted cash.
2026 guidance and market outlook: “two halves”
For first-quarter 2026, Weatherford guided revenue to $1.125 billion to $1.165 billion and adjusted EBITDA to $230 million to $240 million. Dhruv said the sequential decline reflects typical seasonality and some work that was pulled into Q4, including items in Brazil and the Gulf of the Americas, as well as a slight impact from weather in Texas. He also noted year-over-year comparisons are affected by the Argentina divestiture, which contributed for a full quarter in Q1 2025.
For full-year 2026, Weatherford guided revenue to $4.6 billion to $5.05 billion and adjusted EBITDA to $980 million to $1.12 billion. Dhruv said the company expects “slight revenue declines, but improving margins and strong free cash flow generation.” He projected full-year 2026 adjusted free cash flow conversion in the low-to-mid 40% range and an effective tax rate in the low-to-mid 20% range.
On the market backdrop, Saligram said North America spending is expected to decline in 2026, with mid- to high-single-digit activity declines as operators maintain tight budgets. Internationally, he said the first half could see more-than-normal seasonal declines amid geopolitical conflict, trade policy impacts, commodity price volatility, and concerns about a global oil demand-supply imbalance. He said the company is encouraged by second-half opportunities tied to contract awards and project startups in Saudi Arabia, Argentina, the UAE, Brazil, Australia, Indonesia, and Egypt, and expects international activity levels to be flat to slightly down in 2026 versus 2025—while noting the possibility that second-half 2026 international revenues could be up year-over-year.
Saligram and Dhruv also discussed areas of potential upside and strategic focus, including early signs of improvement in offshore deepwater activity and Weatherford’s managed pressure drilling offering. Saligram said the company completed more than 70 jobs in 2025 during the first full year of commercial availability for its Modus performance-tier MPD solution. He also stressed that any potential Venezuela recovery was not included in guidance, outlining the conditions he said would be needed before Weatherford could re-enter at scale, including regulatory clarity, safety and operational stability, and a clear line of sight to payment.
About Weatherford International (NASDAQ:WFRD)
Weatherford International (NASDAQ: WFRD) is a global oilfield services company specializing in the development, design and manufacturing of equipment and technologies for oil and natural gas drilling, evaluation, completion and production. The company’s core offerings include well construction services such as directional drilling and wellbore positioning, well completion solutions that encompass sand control and zonal isolation technologies, and production enhancement services involving artificial lift systems and well intervention tools.
In addition to its comprehensive service lines, Weatherford provides a range of drilling optimization and reservoir evaluation products.
