HAL · Q4 2025 Earnings

Cautious

Halliburton

Reported January 21, 2026

30-second summary

Halliburton printed $5.70B revenue (+0.8% YoY, +1% QoQ) and $0.69 non-GAAP EPS with adjusted operating margin at 15% — the print itself materially beat the Q3-set bar, with North America down only 6.6% sequentially / QoQ vs. the -12% to -13% QoQ guide, and international growth of ~7% QoQ roughly doubling the 3-4% prior sequential guide. Forward, management is framing 2026 as "a rebalancing year": North America guided down high single digits, international flat to up modestly, capex nudged to $1.1B from the prior ~$1B, and a one-quarter C&P margin air-pocket (-300bps QoQ in Q1) driven by Q4 completion tool sales running 3x the two-year average. The tone shift is the real story — Jeff Miller has moved from "tough market" language a quarter ago to "I've never been more excited about the future of Halliburton," with Venezuela reentry and VoltaGrid scaling as the two new bull legs.

Headline numbers

EPS

Q4 FY2025

$0.69

Revenue

Q4 FY2025

$5.70B

+0.8% YoY

Free cash flow

Q4 FY2025

$0.88B

Operating margin

Q4 FY2025

13.0%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$5.70B	+0.8%	$5.60B	+1.8%
EPS	$0.69	—	$0.58	+19.0%
Operating margin	13.0%	—	6.0%	+700bps
Free cash flow	$0.88B	—	$0.28B	+217.0%

Guidance

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

Metric	Period	Prior guide	Actual	Δ	Result
Completion and Production revenue change	Q4 FY2025	down 4% to 6%	+2.8%	+8.8 to +10.8pts above guide	Missed
Drilling and Evaluation revenue change	Q4 FY2025	flat to down 2%	-1.8%	-1.8pts below midpoint of guide; within range	Missed
Drilling and Evaluation margin change	Q4 FY2025	up 50 to 100 basis points	down (actual margin performance not disclosed)	guidance expected expansion; margins contracted	Missed
International revenue growth	Q4 FY2025	3% to 4%	~7% blended international growth	+3 to +4pts above guide	Beat
North America revenue change	Q4 FY2025	down 12% to 13%	-6.6%	+5.4 to +6.4pts above guide	Beat

New guidance

Metric	Period	Guide	YoY
North America revenue change	FY2026	decline high single digits compared to 2025	—
International revenue outlook	FY2026	flat to up modestly	—
SAP S4 migration expense run rate	FY2026	$40 to 45 million per quarter	—
SAP project completion	FY2026	Q4 2026	—
Expected SAP savings	FY2026	about $100 million annually	—
Effective tax rate	Q1 FY2026	approximately 21 percent	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Capital expenditures	FY2026	around $1 billion	about $1.1 billion	+$100M vs. prior guide	Raised

Reaffirmed unchanged this quarter: Completion and Production margin change (down 25 to 75 basis points)

Segment KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
Completion and Production	$3.268B	+2.8%
Drilling and Evaluation	$2.389B	-1.8%
Completion and Production Operating Income	$570 million	—
Drilling and Evaluation Operating Income	$367 million	—

Other KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
North America	$2.207B	-6.6%
Latin America	$1.066B	+7.0%
Europe/Africa/CIS	$0.928B	+12.0%
Middle East/Asia	$1.456B	+3.0%
Adjusted Operating Margin	15%	—
Operating Cash Flow	$1.2 billion	—
Free Cash Flow Return to Shareholders (Full Year)	85%	—
Full Year Share Repurchases	$1.0 billion	—
Dividend Per Share (Q4)	$0.17	—
Full Year Free Cash Flow	$1.857 billion	—

Management tone

Q2 ("softer than previously expected") → Q3 (retrenchment, "tough market today", -30% capex cut) → Q4 (Q4 actuals beat the bear case, "I've never been more excited about the future of Halliburton") → 2026 framed as rebalancing into "sustained strong growth".

A quarter ago, Jeff Miller called North America "a tough market today" and admitted the timing and shape of recovery remained uncertain. This quarter the same CEO opened with "I've never been more excited about the future of Halliburton" and "the shift from idealism to pragmatism is refreshing" — a striking pivot in 90 days, made against a backdrop of management still guiding NA down high single digits in 2026. The signal: management believes the current quarter's NA beat (-6.6% QoQ vs. -12-13% QoQ guide) validates that the cycle has bottomed, and is willing to front-run that narrative even before the data confirms it.

The second tonal shift is on North America strategy. Two quarters ago, management was apologizing for white space and stacking uneconomic fleets defensively. This quarter the language is overtly strategic: "Our strategy in North America is to maximize value. This means that we prioritize returns over market share." The anchor evidence — 65,000 HP for simulfrac vs. competitor 120,000 HP — is being used to argue that Halliburton's stacked capacity is now a coiled spring, not a stranded asset. "I expect North America is the first to respond when macro fundamentals improve" is a meaningful escalation from "flattish with some bright spots" three months ago.

The third shift is Venezuela going from closed chapter to imminent opportunity. Venezuela was not a topic in Q2 or Q3 commentary; this quarter Miller said "my phone is ringing off the hook in terms of interest in Halliburton being there" and management committed to weeks-to-mobilize and months-to-full-operations once payment certainty is resolved. The completion tool order book is at an all-time high, biased toward deepwater — a concrete underpinning that wasn't disclosed in prior quarters.

The fourth shift is VoltaGrid hardening from a strategic narrative into a sized commitment. In Q3, VoltaGrid was introduced as a partnership concept. This quarter management disclosed manufacturing capacity secured for 400 MW of modular natural gas power systems for delivery in 2028 to support data center development across the Eastern Hemisphere, with initial rollout targeted for the Middle East. Miller called it "very big business over time," with international pipeline building. The narrative is now backed by a number — though the 2028 delivery timing means near-term revenue contribution is limited.

The fifth shift, and the most important caution, is the one-quarter Q1 margin air-pocket being telegraphed against the bullish framing. C&P margins guided -300bps QoQ in Q1 (from the Q4 17% segment margin to ~14%) — more than half of which management attributed to Q4 completion tool sales running 3x the two-year average that will not repeat. The Q4 print, in other words, was partially flattered by an outsized tool sale tailwind. That doesn't undo the NA and international beats, but it does mean the run-rate is meaningfully below the Q4 headline.

Recurring themes management leaned on this quarter:

Market rebalancing and recovery sequencing (North America leads)Technology differentiation driving outsized value (Zeus, iCruise, sensory)Collaborative value proposition winning with IOCs/NOCsStrategic fleet stacking prioritizing returns over market shareVenezuela reentry as near-term commercial opportunityInternational growth engines (unconventionals, artificial lift, drilling) outpacing rig count declines

Risks management surfaced:

Geopolitical disruptions impacting commodity prices and activityNorth America market declining high single digits in 2026Larger tenders becoming more competitiveLegal and payment certainty requirements for Venezuela reentrySAP migration execution risk (project extended to Q4 2026)

Q&A highlights

Neil Mehta · Goldman Sachs

International market breakdown by region for 2026 outlook, and details on VoltaGrid's strategic importance, size potential, and Halliburton's role as consolidator vs. minority investor.

Latin America leading growth (Brazil deepwater, Argentina, Guyana); Middle East flattish to slightly down due to conservative Saudi timing view; Asia Pacific flattish. VoltaGrid positioned as very big business over time with 400 MW committed; strong international pipeline combining VoltaGrid technology with Halliburton execution; data center power demand supports long-term growth.

Latin America: Brazil, Argentina, Guyana driving growthMiddle East: flattish to slightly down despite Saudi rig additionsAsia Pacific: flattish outlook for 2026VoltaGrid: 400 megawatts committed as starting point

David Anderson · Barclays

North American stimulation market rebalancing dynamics, pricing trajectory, equipment redeployment impacts, and C&P margin progression throughout 2026 including multi-chem sale impact.

Pricing stable in Q4 and Q1; market at bottom with bias toward improvement; equipment attrition, no new investment, and international redeployment support pricing recovery over time. C&P margins down 300 bps Q4-Q1 driven by completion tool sales strength (>50% of drop), international seasonality (~25%), and product mix; multi-chem sale completion expected this quarter with positive but immaterial margin impact.

Pricing stable Q4 through Q1C&P margin guidance: ~300 bps down Q4 to Q1Completion tool sales in Q4 up 3x prior two-year averageMulti-chem sale impact: positive but not material to overall margins

Aaron Jayaram · JP Morgan

2026 EBITDA guidance expectations relative to street estimates (~$4B), and technology initiatives like Zeus IQ and lightweight proppants/surfactants for North American well productivity.

Street's $4B EBITDA estimate within range of outcomes being considered; H2 better than H1 margins with slight progression. Zeus IQ's PropInt placement capability unique differentiator for sand placement control and recovery improvement; proppant placement historically unknown since 1947, now measurable and controllable; Zeus IQ handling of pressure/reservoir response drives value.

$4 billion 2026 EBITDA within management's outcome rangeH2 2026 margin better than H1Zeus IQ PropInt placement control enables sand placement measurement for first time in industry historyZeus IQ pressure handling and reservoir response capability core to recovery improvement

Derek Podhazer · Piper Sandler

U.S. land fleet attrition mechanics including stacking, high-grading, and equipment redeployment; tangible fleet capacity; and Middle East regional breakdown by country.

Consciously stacked fleets in Q3/Q4 available for return at acceptable returns; international redeployment path. Market fleet consolidation evident: 65,000 HP Halliburton simulfrac vs. 120,000 HP competitor fleet doing similar work indicates tight market with limited expansion capacity. Small demand increase could create rapid tightness. Middle East: UAE strong, Kuwait very strong, Iraq positive activity story, Saudi rig additions positive but timing cautious.

Halliburton horsepower efficiency: 65,000 HP for simulfrac vs. competitor 120,000 HPFleets consciously stacked in Q3/Q4; available for redeployment internationallyMarket tight with limited ability to expand or assemble additional fleetsUAE: strong; Kuwait: very strong; Iraq: good activity uptick; Saudi: positive but cautious timing

Mark Bianchi · TD Cowan

Offshore market outlook for 2026 H2 uptick expectations and Venezuela business growth timeline including IOC involvement, payment certainty resolution, and mobilization pace.

Offshore strong with bias toward integration value proposition; won significant offshore work; strong in Norway, Latin America, West Africa. Completion tool order book at all-time high, biased toward deepwater/offshore. Venezuela: multiple paths forward including IOC and existing operators; payment certainty key; can mobilize in weeks to months as solutions finalized; ongoing customer conversations on both operating and prospective basis.

Offshore: all-time high completion tool order bookOffshore strength in Norway, Latin America, West AfricaVenezuela mobilization capability: weeks to mobilization, months to full operationsVenezuela: payment certainty resolution key driver

Answers to last quarter's watch list

Q4 North America revenue landing point — NA came in at $2.21B (-6.6% QoQ), materially above the -12-13% QoQ guide that implied $2.05-2.08B. Management language shifted from "white space" to "first to respond when macro fundamentals improve" — explicitly cyclical, not structural. Status: Resolved positively

C&P Q4 margin trajectory — C&P segment operating margin moved from ~16% in Q3 to ~17% in Q4 (operating income $570M vs. $514M), a ~+100bps QoQ swing against a prior guide of down 25-75bps — a clear beat. But management's Q1 commentary reveals >50% of the Q4 outperformance came from completion tool sales running 3x the two-year average, not from sustainable cost reset. The $100M/quarter savings claim is therefore not yet falsified, but also not yet proven. Status: Continue monitoring

VoltaGrid partnership milestones — 400 MW of manufacturing capacity secured for 2028 delivery to Eastern Hemisphere data centers, with initial Middle East rollout; management called it "very big business over time" with international pipeline building. No segment-level dollar contribution disclosure, and the 2028 delivery window pushes meaningful revenue out beyond 2026. Status: Resolved positively (with timing caveat)

2026 capex execution against the $1B target — capex guide creeps to ~$1.1B from ~$1B, attributed to "timing impact of late deliveries." Small walk-back; not a directional repricing. Status: Continue monitoring

Tariff gross impact — the company didn't quantify Q4 tariff impact or 2026 tariff outlook on the print. Status: Not resolved

Buyback pace into 2026 — full-year 2025 buybacks landed at $1.0B (~$250M/quarter pace held); FCF return to shareholders 85%. Capital returns framework intact, no step-down. Status: Resolved positively

What to watch into next quarter

Q1 C&P margins landing point — guided -300bps QoQ. If margins compress by more than 300bps despite stable pricing commentary, the "Q4 was flattered by one-time tool sales" narrative becomes a "underlying margin reset is worse than disclosed" narrative. Watch the actual print against the ~14% implied Q1 C&P margin (17% Q4 less ~300bps).

Venezuela commercial close — management said weeks to mobilize, months to full operations. By Q1 reporting, expect either a concrete announcement (operator, scope, expected revenue contribution) or a continued "in negotiation" placeholder. Continued placeholder = the "phone ringing off the hook" framing was rhetorical.

2026 capex run-rate in Q1 — implied ~$275M/quarter at the new $1.1B FY guide. Any Q1 print above $300M means the late-deliveries timing explanation is masking actual capex creep.

Completion tool order book conversion — management cited all-time-high order book biased to deepwater/offshore. Watch for Q1 commentary on offshore C&P revenue contribution and whether the FY2026 backlog visibility tightens or loosens.

VoltaGrid project pipeline build — 400 MW secured for 2028 delivery means meaningful revenue contribution is a 2027+ story, not 2026. Watch instead for incremental capacity announcements, customer/site disclosures, or engineering-review-to-contract conversions; absence of pipeline progression through 2026 would be a credibility issue given the "very big business" framing.

D&E margin trajectory — Q4 D&E margins delivered ~+75bps QoQ (within the +50-100bps guide), and Q1 is guided down 25-75bps QoQ. Watch whether D&E can hold the higher-margin trajectory against international pricing pressure, particularly as larger international tenders become more competitive.

SAP run-rate hold — $40-45M/quarter all year, project complete Q4 2026, $100M annual savings post-completion. Any expense overrun or timeline slip directly damages 2027 earnings power.

Sources

Halliburton Q4 2025 press release / 10-K filing, SEC EDGAR — https://www.sec.gov/Archives/edgar/data/45012/000004501226000008/livemastererdocument.htm
Halliburton Q4 2025 earnings call commentary and Q&A (Goldman Sachs, Barclays, J.P. Morgan, Piper Sandler, TD Cowen)

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