Earnings Recap — Q3 FY2026
CY Q3 2026 · Reported August 5, 2026 · Beat 2 of last 7 quarters
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Helmerich & Payne's strong results and raised guidance signal continued robust demand for drilling services, which is a key input to oil and gas production that supports energy for AI data centers. The company's expansion in Argentina and geothermal projects reflects growing energy demand, including from AI-driven power needs. Its technology leadership, including FlexRobotics, enhances drilling efficiency, potentially reducing costs for operators and supporting the broader energy infrastructure buildout.
Helmerich & Payne delivered strong Q3 FY2026 results, with revenue over $1 billion (up 11% sequentially) and adjusted EBITDA of $236 million, exceeding guidance across all segments. North America Solutions averaged 142 rigs, adding 10 rigs during the quarter, with direct margins of $241 million. International Solutions generated $31 million in direct margin, with 22 rigs operating in Saudi Arabia and continued progress in Argentina. Offshore Solutions delivered $29 million in direct margin, helped by performance bonuses. The company also advanced FlexRobotics deployment, signed geothermal agreements, and secured a third rig in Australia.
Management raised Q4 and full-year guidance for North America Solutions, citing strong customer demand and a stronger activity and pricing environment. International Solutions is expected to achieve a quarterly direct margin run rate of at least $45 million, supported by Argentina growth and Middle East recovery. Offshore guidance was upgraded for the full year. Management initiated enterprise optimization initiatives targeting $40M annualized corporate cost reductions and over $160M in asset sales by end of FY2027, while prioritizing debt repayment toward a 1x net debt/EBITDA target. They expressed confidence in a multiyear growth cycle, with super-spec utilization at 95% and continued demand from private operators and international markets.
“We delivered strong financial and operational performance during the quarter, led by our operations in the U.S. Adjusted EBITDA was $236 million coming in comfortably ahead of the implied midpoint of our guidance.”
on Q3 performance
“We are on track to surpass 150 rigs during the quarter, which is at least 17 more than we were operating in a recent trough in February.”
on North America activity
“We are nearing 100% utilization securing multiyear contracts for our remaining idle flex rigs, available in country as well as contracts for an additional 3 rigs that will be exported from the United States.”
on Argentina growth
Just wanted to start things off here with maybe walking through the different puts and takes for your fiscal Q4 guide and how you expect to sustain momentum that you are building into fiscal 27. If you can hit on, NAS, international and offshore, I think that would be great.
Management highlighted sequential improvement driven by activity growth across all segments, with NAS leading, international benefiting from Latin America and Middle East reactivations, and offshore providing stability. They expect continued EBITDA growth into 2027, with international as the fastest-growing segment.
I want to unpack the outlook for NAS a bit more. You beat on fiscal Q3 margins, but then Q4 is down a bit. How much are activation and reactivation costs weighing on margins? How did-- how much did the performance bonuses contribute to Q3, and how you think about those going forward?
Management attributed margin fluctuation to lumpy performance bonuses, with over 50% of rigs on performance-based contracts. Reactivation costs were a small component. They highlighted strong demand for super-spec rigs and continued technology investments, with FlexRobotics performing well.
I wanted to dig in a little bit on your financial framework You have kind of given us some interesting views on how you see capital you know, progressing beyond, you know, 2026? You highlight you called it $300 million maintenance plus sustaining kind of program. Perhaps for you, Todd, I was wondering how you think about you know, maintaining that level of CapEx just in an environment where your international activity will be growing?
Todd Scruggs emphasized commitment to debt reduction and disciplined capital spending, noting that growth can be unlocked from the current portfolio without significant incremental capital. He highlighted the ability to generate substantial free cash flow and return capital to shareholders sustainably.