Oil States 2025 Q2 Earnings Net Income Growth Despite Revenue Decline

Oil States International, Inc. reported its fiscal 2025 Q2 earnings on Jul 31st, 2025. The company announced consolidated revenues of $165.4 million for the quarter, which marked a 3% sequential increase but an 11.3% decrease from the same period last year. Net income reached $2.8 million, showcasing a year-over-year growth of 116%. Although the revenue fell short of expectations, the company maintained its guidance for the year, anticipating continued strength in international and offshore activities. Oil States remains optimistic about its strategic investments and restructuring efforts.

Revenue
Oil States International saw a decline in total revenue, falling 11.3% to $165.41 million in Q2 2025 compared to $186.38 million in Q2 2024. The offshore segment posted strong performance with revenues increasing sequentially by 15% to $106.6 million, while the Completion and Production Services and Downhole Technologies segments experienced declines due to reduced U.S. land activity.

Earnings/Net Income
Oil States' EPS rose substantially by 150% to $0.05 in Q2 2025 from $0.02 in Q2 2024, marking continued earnings growth. The company's net income also increased significantly, reaching $2.81 million, up 116.1% from $1.30 million in the previous year. The EPS growth indicates positive financial performance despite revenue challenges.

Price Action
The stock price of Oil States saw a decline, tumbling 9.27% during the latest trading day, 13.22% during the most recent full trading week, and dropping 6.90% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing Oil States shares after a quarterly revenue drop and holding for 30 days did provide moderate returns, although it underperformed the market. The strategy achieved a compound annual growth rate (CAGR) of 5.75%, which was notably lower than the benchmark by 53.58%. Despite its minimal risk, indicated by a maximum drawdown of 0.00% and a Sharpe ratio of 0.09, the strategy's conservative returns make it appealing for investors looking for stability amid market volatility.

CEO Commentary
Cindy B. Taylor, President and Chief Executive Officer, highlighted that consolidated results for the second quarter were primarily driven by robust international and offshore activity. This was demonstrated by a 15% sequential revenue increase in the Offshore Manufactured Products segment, totaling $107 million, and an 18% rise in Adjusted Segment EBITDA to $21 million. However, the Completion and Production Services and Downhole Technologies segments faced challenges due to a decline in U.S. land completion-related activity, resulting in a revenue decline of 13% and an Adjusted EBITDA decrease of 12%. Ongoing U.S. land restructuring efforts led to a reduced revenue mix from this segment.

Guidance
The company expects continued strength in international and offshore activities, with a focus on enhancing its backlog, which reached $363 million with a book-to-bill ratio of 1.1x. Oil States anticipates further benefits from investments in technology and innovation, particularly in their new manufacturing facility in Batam, Indonesia. The leadership acknowledges ongoing challenges in U.S. land activities but remains optimistic about future performance, particularly through strategic investments and restructuring efforts.

Additional News
Oil States International recently received the Meritorious Engineering Award from Hart Energy for its Low Impact Workover Package. The innovative package is designed to enhance plug and abandonment operations while safeguarding aging wells, showcasing Oil States' commitment to technological advancement. Additionally, the company has been actively repurchasing shares and reducing debt, having bought $15 million principal amount of convertible senior notes and $7 million of common stock in Q2 2025. Furthermore, strategic investments are being made in a new manufacturing facility in Batam, Indonesia, which is nearing completion and aims to bolster the company's international presence.