tapebrief
HAL · Q4 2025

HAL · Q1 2026 Earnings

Cautious

Halliburton

Reported April 21, 2026

30-second summary

Halliburton printed $5.4B revenue (-0.3% YoY, -4.5% QoQ) and $0.55 EPS with operating margin at 12.6%. The forward setup is the news: management guided Q2 FY2026 C&P revenue +4-6% QoQ with margins +50-100bps (a clear sequential recovery call) and Q2 FY2026 D&E flat to -2% QoQ with margins -75 to -125bps (software seasonality roll-off), while quantifying a $0.07-0.09/share Middle East drag in Q2 FY2026 — roughly triple the Q1 FY2026 hit of 2-3 cents — with a further $0.03-0.05 of downside if offshore restart slips. Jeff Miller's "early innings of a recovery" framing on North America now has a numerical companion in the C&P sequential guide, but NA revenue still fell 4.5% YoY and the $100M Q1 FY2026 buyback (down from the $250M/quarter 2025 pace) shows management is hedging its own conviction with the balance sheet.

Headline numbers

EPS

Q1 FY2026

$0.55

Revenue

Q1 FY2026

$5.40B

-0.3% YoY

Free cash flow

Q1 FY2026

$0.12B

Operating margin

Q1 FY2026

12.6%

Key financials

Q1 FY2026
MetricQ1 FY2026YoYQ4 FY2025QoQ
Revenue$5.40B-0.3%$5.70B-5.3%
EPS$0.55—$0.69-20.3%
Operating margin12.6%—13.0%-40bps
Free cash flow$0.12B—$0.88B-85.9%

Guidance

Halliburton beat segment and margin guidance in Q1 FY2026, with international markets significantly outperforming despite Middle East geopolitical headwinds; no forward guidance provided for Q2 FY2026.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
Completion and Production RevenueQ1 FY2026decrease 7% to 9% sequentially$3.016Bin-lineMet
Completion and Production Operating MarginQ1 FY2026decline about 300 basis points sequentially$439M operating incomein-lineMet
Drilling and Evaluation RevenueQ1 FY2026decline 2% to 4% sequentially$2.386B+3.9% above guideBeat
Drilling and Evaluation Operating MarginQ1 FY2026decline 25 to 75 basis points sequentially$351M operating incomeabove guide (positive inflection vs. expected margin decline)Beat
North America RevenueQ1 FY2026decline high single digits compared to 2025$2.136B-4.5% YoY in-line with high single digit decline guideMet
International RevenueQ1 FY2026flat to up modestly (full year FY2026 expectation)$3.264B international total+9.1% YoY (Latin America +21.7%, Europe/Africa/CIS +10.7%, offset by Middle East/Asia -12.7%)Beat
SAP S/4HANA Migration ExpenseQ1 FY2026about $45 millionin-line with $45M guidancein-lineMet
Operating MarginQ1 FY2026compression from segment margin declines12.6%above expectations given segment headwindsBeat

Segment KPIs

Q1 FY2026
SegmentQ1 FY2026YoY
Completion and Production$3.016B-3.3%
Drilling and Evaluation$2.386B+3.9%

Other KPIs

Q1 FY2026
SegmentQ1 FY2026YoY
North America$2.136B-4.5%
Latin America$1.09B+21.7%
Europe/Africa/CIS$0.858B+10.7%
Middle East/Asia$1.318B-12.7%
Completion and Production Operating Income$439 million—
Drilling and Evaluation Operating Income$351 million—
Operating Margin12.6%—
Adjusted Operating Income$679 million—
Cash Flow from Operations$273 million—
Middle East Geopolitical Impact2-3 cents per diluted share negative—

Management tone

Q1 FY2026 ("early innings of a recovery" in NA, backed by a +4-6% QoQ C&P guide).

The North America framing is now numerically backed. Jeff Miller went further than prior quarters: NA is "early innings of a recovery," with Shannon Slocum telling analysts that Q2 FY2026 frack calendar white space is "all but gone" and premium equipment is approaching sold-out across the industry. Miller's framing in the Barclays exchange: the supply overhang is no longer a concern, structural demand remains intact, and energy security is no longer a talking point — that, in his view, drives activity for "a solid few years." Crucially, this is no longer just rhetoric — the Q2 FY2026 C&P guide of +4-6% QoQ with +50-100bps margin expansion converts the bullish tone into a sequential number. The honest read: NA revenue still declined 4.5% YoY this quarter, but the forward guide now puts management's credibility on the line at a quantified level.

The second shift is the Middle East going from a manageable regional headwind to a quantified and escalating geopolitical drag. This quarter the region is down 12.7% YoY with management attributing 2-3 cents/share to geopolitical disruption in Q1 FY2026 and guiding a far larger $0.07-0.09/share drag in Q2 FY2026 — with $0.03-0.05 of additional downside if offshore restart slips. The framing has fully shifted to "geopolitical conflict" (exogenous, indeterminate duration, escalating near-term).

The third shift is international diversification hardening into a bifurcated growth story. Management's Q&A explicitly separated "ex-Middle East" international (mid-to-high single-digit growth for the full year) from Middle East (exposed to conflict duration). Latin America at +21.7% YoY and the YPF contract rolling Zeus fleets out of North America into Argentina is now the structural offset. Per Shannon Slocum on the YPF contract economics, equipment goes to the best place for returns and pricing — a quietly important admission that the highest returns on Zeus capacity are no longer in the home market.

The fourth shift is the buyback walk-down. Management is steering analysts to read the $100M Q1 FY2026 print as macro-driven timing ("Q2 higher than Q1, H2 higher than H1"), not a framework change. But the actual print reflects a meaningful step-down from the 2025 $250M/quarter pace, and subscribers should not assume the 2025 $1B annual pace returns absent explicit reconfirmation.

Q&A highlights

David Anderson · Barclays

How has the Iran conflict and Middle East disruption changed Halliburton's multi-year outlook, particularly regarding energy security and global supply dynamics? What signs of North America recovery are evident beyond white space compression?

Jeff Miller emphasized that the supply overhang is now gone and energy security is now a driver of activity for several years, not just a talking point. Shannon Slocum noted white space for Q2 is largely filled, with pull-forwards and H2 firming up. They see North America as early innings of recovery with improving return dynamics rather than market share gains.

Supply overhang is eliminated as a concernEnergy security expected to drive activity for several yearsQ2 FRAC calendar white space is goneH2 demand is firming up

Scott Gruber · Citigroup

Will international shale developments utilize more Zeus electric fleets given efficiency advantages, or will less mature markets pull legacy diesel fleets from the U.S.? How should equipment demand evolve internationally?

Shannon Slocum clarified that Zeus deployment internationally follows same discipline as U.S.: only to contracts with sufficient duration to return capital. Early-stage exploration markets don't demand Zeus capability yet. YPF Argentina contract is already rolling out with fleets arriving now through end of year; positioned as best returns relative to North America despite margin profile questions.

Zeus fleets only deployed to contracts with multi-year durationArgentina contract already deploying fleets now through year-endEquipment being moved from North America to Argentina due to superior pricingYPF contract provides sustainable long-term work

Arun Jayaram · JP Morgan

Can you elaborate on strength in LATAM and Europe-Africa outside Middle East? How does the mid-to-high single-digit international growth outlook compare to pre-conflict expectations?

Shannon Slocum highlighted Latin America as leading region with strong Caribbean work (Guyana, Suriname), recent multi-billion-dollar YPF Argentina award, and deep-water Brazil activity. Europe-Africa showing strength in Norway with expected rig adds H2/early 2027 and West Africa opportunities in Namibia and Nigeria. Mid-to-high single-digit growth expected for full-year international ex-Middle East remains unchanged from pre-conflict view.

YPF multi-billion-dollar integrated completion services award in ArgentinaFirst deployment of Zeus electric fleets outside North America in ArgentinaLatin America revenue grew 22% YoY in Q1Norway market strong with collaborative positioning

Greg Corder · Goldman Sachs

Why was Q1 buyback of $100 million lower than $250 million quarterly run rate in 2025? How should we think about buyback trajectory for 2026?

Eric Correa confirmed no change in shareholder return philosophy. Q1 buyback was intentionally lower due to macro concerns at year-start regarding Middle East activity speed (as mentioned on Q4 call). Q2 expected higher than Q1, H2 higher than H1. Long-term objective remains per-share value creation.

Q1 2026 buyback: $100 million (intentionally below $250M quarterly run rate)Q2 buybacks expected higher than Q1H2 buybacks expected higher than H1Long-term shareholder return philosophy unchanged

Stephen Gingaro · Stifel

Are customers willing to take diesel equipment if available? How much are they considering the price arbitrage between diesel and natural gas, and how does this affect frack fleet pricing power?

Shannon Slocum noted customers seek most effective solutions but equipment selection is more about availability/tightness than arbitrage. Oil price and commodity demand drive capacity decisions more than diesel vs. gas arbitrage. E-fleets valuable because of subsurface/recovery capability (Zeus IQ), not just gas cost savings. Tightness is key driver, not fuel arbitrage.

Equipment tightness, not arbitrage, drives utilization decisionsOil commodity price and demand more important than fuel arbitrageZeus IQ value primarily in subsurface recovery improvementPremium equipment approaching sold-out status industry-wide

Answers to last quarter's watch list

Q1 FY2026 C&P margins landing point — C&P operating income of $439M on $3.016B revenue implies ~14.6% segment margin, almost exactly the ~14% implied by the prior quarter's guide (17% less ~300bps). The completion-tool one-time tailwind unwound on schedule and the underlying margin reset is not worse than disclosed. Status: Resolved positively
Venezuela commercial close — Jeff Miller confirmed progress in Venezuela: bases in better shape than expected, commercial term discussions underway, "lots of inbounds." Still no concrete operator/scope/timing announcement, but the framing moved forward. Status: Progressing
2026 capex run-rate in Q1 FY2026 — capex was $192M in Q1 FY2026 vs. the implied $275M/quarter run-rate at $1.1B FY (reaffirmed). Running below pace early; late-deliveries timing explanation has not produced an early-year overshoot. Status: Resolved positively
Completion tool order book conversion — no specific update on offshore C&P revenue contribution or backlog visibility in the press release. Status: Continue monitoring
VoltaGrid project pipeline build — Jeff Miller reaffirmed the 400 MW international pipeline and described "lots of inbounds" across Australia, Japan, Canada. Pipeline still framed qualitatively, no incremental capacity disclosure. Status: Continue monitoring
D&E margin trajectory — D&E margins came in at ~14.7%, down ~70bps QoQ from 15.4%, landing inside the guided -25 to -75bps decline. Revenue was essentially flat QoQ vs. a guided 2-4% decline — a modest revenue beat with margin in-line. Status: In-line with guide
SAP run-rate hold — Q1 FY2026 SAP expense was $42M (slightly below the ~$45M guide); Q2 FY2026 guide is ~$45M; run-rate confirmed at $40-45M/quarter through Q4 FY2026 with $100M annual savings post-completion. No timeline slip. Status: Resolved positively

What to watch into next quarter

C&P Q2 FY2026 execution against the +4-6% revenue / +50-100bps margin guide — this is the single most important forward number management put on the table. A landing inside the guide validates the "early innings of recovery" NA framing; a miss undercuts the tonal escalation.

Middle East/Asia trajectory and Q2 FY2026 EPS drag realization — management guided $0.07-0.09/share Q2 FY2026 drag with $0.03-0.05 of additional downside if offshore restart slips. Watch whether the realized impact lands inside the guided range or pushes higher, and whether Q3 FY2026 commentary signals a narrowing or persistent drag.

Buyback step-up to >$200M in Q2 FY2026 — management committed Q2 FY2026 higher than Q1 FY2026 ($100M). A Q2 FY2026 print at $150-175M would confirm the conservative posture is structural for 2026; $200M+ would signal management conviction on H2 actually returning. Below $150M would be a meaningful negative.

YPF Argentina ramp evidence — Latin America at +21.7% YoY this quarter is partly pre-Zeus deployment. Q2 FY2026 should be the first quarter showing Zeus revenue contribution from Argentina. Watch for explicit LATAM revenue/margin call-outs and whether the fleets-from-NA migration is accelerating.

D&E Q2 FY2026 landing point — guided flat to -2% revenue and -75 to -125bps margin on seasonal software roll-off. Watch whether the margin compression matches management's seasonal framing or whether it persists past Q2 FY2026, which would imply underlying mix pressure beyond software.

Venezuela conversion — progress framing this quarter (bases in shape, commercial terms in discussion) needs to convert into a concrete contract/scope announcement in Q2 FY2026 to validate the multi-quarter buildup.

Effective tax rate sustainability — FY2026 guide lowered from ~21% to ~20%; Q1 FY2026 came in at 18.5% partly on a $32M valuation allowance release. Watch whether the run-rate holds near 20% absent further discrete benefits.

Sources

  1. Halliburton Q1 FY2026 press release (Exhibit 99.1), SEC EDGAR — https://www.sec.gov/Archives/edgar/data/45012/000004501226000036/livemastererdocument.htm
  2. Halliburton Q1 FY2026 earnings call Q&A (Barclays, JP Morgan, Bank of America, Evercore, Melius, Goldman Sachs, Rothschild, Citigroup)

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.