Oil States (OIS) Q2 Offshore Sales Up 5% | The Motley Fool

Oil States International (OIS -2.20%), a provider of specialized products and services for the offshore oil and gas industry, reported Q2 2025 earnings on July 31, 2025. The most notable update was a continued shift toward offshore and international projects, helping offset a significant downturn in U.S. land-based activity. The company reported adjusted diluted earnings per share (EPS) of $0.09 (non-GAAP), which exceeded Wall Street estimates on a non-GAAP basis. Revenue (GAAP) totaled $165.4 million, missing the expected $170.7 million (GAAP). Overall, the period reflected solid execution in international markets but ongoing weakness in U.S. land operations and mixed results for cost management.

Metric Q2 2025 Q2 2025 Estimate Q2 2024 Y/Y Change
EPS – Diluted (Non-GAAP) $0.09 $0.09 $0.07 28.6 %
Revenue $165.4 million $170.7 million $186.4 million (11.3 %)
Adjusted EBITDA $21.1 million N/A -100.0 %
Free Cash Flow $8.1 million $14.9 million (45.6 %)

Source: Analyst estimates for the quarter provided by FactSet.

About Oil States International and Business Focus

Oil States International supplies highly engineered products and services for customers in the offshore and land-based oil and gas markets. Its core business includes the design and manufacturing of equipment for offshore platforms and subsea oilfield installations, as well as downhole technologies used in well construction and completion.

The company’s business is shaped by the cyclical nature of global energy demand. Recent strategy centers on capturing stable, long-term projects offshore and internationally, which are less sensitive to swings in oil prices than domestic U.S. land-based activities. Innovation, regulatory compliance, and operational efficiency remain key to success as management focuses investment and restructuring on the most resilient and profitable areas.

Performance and Developments in the Quarter

The quarter saw a clear division in performance across Oil States International’s business segments. The Offshore Manufactured Products segment, which provides subsea pipeline connectors and related products, was a standout. Revenue for the Offshore Manufactured Products segment rose 5% year over year to $106.6 million, compared to Q2 2024, driven by continued strength in international and offshore activity. Adjusted Segment EBITDA (non-GAAP) reached $21.1 million, with Adjusted Segment EBITDA margin improved to 20%. The segment recorded $112 million in new bookings and ended the period with a backlog of $363 million, its highest since September 2015 as of June 30, 2025. The quarterly book-to-bill ratio, which measures orders received to products delivered, stood at 1.1x. This indicates a healthy pipeline of future work, providing better visibility for upcoming periods.

In contrast, both the Completion and Production Services as well as Downhole Technologies segments were challenged by a sharp drop in U.S. land-based activity. Completion and Production Services, which supports hydraulic fracturing and well servicing, reported revenue of $29.4 million. That was down 37% year over year. Still, the segment improved its adjusted EBITDA margin to 28%, reflecting restructuring efforts. However, it faced $2.2 million in non-cash impairment and downsizing charges. Downhole Technologies, which covers tools and services used inside oil and gas wells during construction and stimulation, continued to struggle. With adjusted segment EBITDA (non-GAAP) for Downhole Technologies fell 61% year-over-year and an operating loss of $4 million. The segment was hit by supply chain challenges, U.S. import tariffs on certain components, and persistent weak demand.

Key metrics confirm this operational split. Offshore and international revenue (GAAP) reached $119.1 million, Offshore and international revenue made up 72% of total sales in Q2 2025, compared to approximately 63.7% in Q2 2024. Meanwhile, U.S. land revenue dropped to $46.3 million. Management continues to address these issues through restructuring, facility consolidations, and cost-reduction programs.

Cost management remained a focal point. The period saw $3.7 million in restructuring costs, including $2.2 million related to Completion and Production Services. The company executed $14.8 million in convertible note repurchases and spent $6.7 million to buy back 2.3% of its outstanding shares, part of a wider effort to strengthen the balance sheet and return capital to shareholders. Capital expenditures totaled $10.3 million, including investments associated with the construction of the new Batam, Indonesia facility, which will support further offshore expansion.

Innovation and recognition were also highlighted. Oil States International received a significant industry award for its Low Impact Workover Package, a streamlined well intervention system designed for plug and abandonment operations. Management highlighted this award as evidence of ongoing efforts to develop advanced, differentiated products and pursue new opportunities.

Looking Ahead

Previously issued guidance called for revenue of $700 million to $735 million for the full year 2025 and full-year 2025 EBITDA guidance of $88 million to $93 million. The strong international bookings and record backlog provide some assurance for near-term revenue stability, but the missed revenue target (GAAP revenue of $165.4 million vs. estimate of $170.7 million for Q2 2025) and persistent U.S. market weakness may pressure the outlook if these trends do not improve.

Investors should watch for updates on U.S. land-based demand, ongoing operating cost reductions, and the continued ramp-up of the Batam, Indonesia facility. The ability to translate record offshore backlog into sustainable margins, while further restructuring underperforming segments like Downhole Technologies, will be important for future results.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Felicia Ray Owens
Felicia Ray Owenshttps://feliciarayowens.com
Felicia Ray Owens is a media founder, cultural strategist, and civic advocate who creates platforms where power meets lived truth. As the voice behind C4: Coffee. Cocktails. Culture. Conversation and the founder of FROUSA Media, she uses storytelling, public dialogue, and organizing to spotlight the issues that matter most—locally and nationally. A longtime advocate for community wellness and political engagement, Felicia brings experience as a former Precinct Chair and former Chief Communications Officer of Indivisible Hill Country. Her work bridges culture, activism, and healing through curated spaces designed to inspire real change. Learn more at FROUSA.org

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