Oil States International's Q2 2025 Earnings Call: Navigating Contradictions in Offshore Projects and Tariff Impacts

Offshore project impact and book-to-bill ratio, impact of tariffs on costs, offshore market dynamics and offshore revenue outlook, impact of tariffs on costs and revenue are the key contradictions discussed in Oil States International, Inc.'s latest 2025Q2 earnings call.



Offshore and International Market Resilience:
- 72% of consolidated revenues were generated from offshore and international projects in Q2 2025, up significantly from the previous quarter and year-over-year.
- This trend was supported by strong demand in international and offshore markets, despite geopolitical instability and lower crude oil prices.

U.S. Land Activity Decline:
- U.S. land drilling and completion activity decreased significantly, with the quarter-end rig count down 8% and the frac spread count down 14% from March 31, 2025.
- The decline was attributed to weaker crude oil prices and OPEC's decision to rapidly unwind over 2 million barrels per day of previous production cuts.

Record Backlog and Book-to-Bill Ratio:
- Oil States achieved a backlog of $363 million, the highest since September 2015, and a book-to-bill ratio of 1.1x for Q2 2025.
- This was supported by strong bookings of $112 million, reflective of continued strength in offshore project activity.

Financial Strength and Cash Flow Generation:
- The company generated $15 million in cash flow from operations in Q2 2025, an increase of 61% sequentially.
- The cash flow was used to repurchase $7 million of common stock and $15 million of convertible senior notes, contributing to deleveraging efforts.