Executive Summary

Q1 2025 delivered a clean beat: revenue $1.281B vs S&P Global consensus $1.189B*, adjusted EBITDA $251M vs $235M*, and diluted EPS $0.00 vs -$0.04*; strength came from a sharp rebound in Completion Services and steady Drilling Services performance .
Management guided Q2 slightly softer sequentially (modest declines in Drilling and Completion adjusted gross profit; Drilling Products flat), citing legacy contract roll-downs, seasonal costs, and potential “white space” late in the quarter; SG&A ~$65M and DD&A ~$230M guided for Q2 .
Strategic progress continued: >80% of active completion fleet is natural-gas capable, with Emerald 100% gas fleets rising as a share of activity; integrated, performance-based agreements are gaining traction and are now ~10% of work, with the first fully integrated “PTEN Advantage” project exceeding expectations .
Capital returns remained active (Q1: $51M returned; $20M buybacks; $0.08 dividend declared for June 16, 2025); net leverage ~1.0x LTM adj. EBITDA and significant liquidity position the company to stay disciplined while pursuing high-return opportunities .

What Went Well and What Went Wrong

What Went Well
- Completion Services rebound: Q1 revenue $766M and adjusted gross profit $108M, with high utilization and cost control partially offsetting lower pricing; natural gas basin activity (Haynesville) improved earlier than expected .
- Drilling Services execution: Q1 revenue $413M; U.S. operating days 9,573; APEX rigs and Cortex automation supported margin resilience and performance-based pricing; segment adjusted EBITDA $161M .
- Drilling Products resilience: Q1 revenue $86M and adjusted gross profit $39M, with margin improvement from operational efficiencies and continued innovation (MAVERICK drill bits) .
What Went Wrong
- Pricing pressure in Completions persisted vs late-2024 levels; while activity recovered, Q2 guidance embeds a slight sequential decline and potential late-quarter “white space” if oil prices remain low .
- Drilling Services outlook: management expects a slight sequential decline in adjusted gross profit in Q2 as legacy contracts roll and seasonal costs rise .
- “Other” will drop in Q2 as PTEN absorbed/divested Great Plains Oilfield Rental assets (two-thirds of “Other” revenue/AGP), cutting expected AGP proportionally .

Financial Results

Headline results versus prior periods

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Billions)	$1.357	$1.162	$1.281
Diluted EPS ($)	$(2.50)	$(0.13)	$0.00
Adjusted EBITDA ($USD Millions)	$275	$225	$251
Adjusted EBITDA Margin (%)	20.3% (calc. from $275M/$1,357M)	19.4% (calc. from $225M/$1,162M)	19.6% (calc. from $251M/$1,281M)

Q1 2025 actuals vs S&P Global consensus

Metric	Consensus*	Actual
Revenue ($USD Millions)	1,188.0*	1,280.5
Adjusted EBITDA ($USD Millions)	234.6*	251.2
Diluted EPS ($)	(0.04)*	0.00

*Values retrieved from S&P Global.

Segment revenues and adjusted gross profit

Segment	Q1 2024 Revenue ($M)	Q4 2024 Revenue ($M)	Q1 2025 Revenue ($M)
Drilling Services	457.6	408.4	412.9
Completion Services	945.0	650.8	766.1
Drilling Products	90.0	86.5	85.7
Other	17.8	16.4	15.9

Segment	Q1 2024 Adjusted Gross Profit ($M)	Q4 2024 Adjusted Gross Profit ($M)	Q1 2025 Adjusted Gross Profit ($M)
Drilling Services	185.8	162.9	165.2
Completion Services	199.4	95.3	108.4
Drilling Products	41.3	37.3	38.7
Other	6.6	6.9	6.8

Operational KPIs (U.S. Contract Drilling)

KPI	Q4 2024	Q1 2025
Operating days – U.S.	9,617	9,573
Avg. revenue per operating day – U.S. ($000s)	$35.29	$35.72
Avg. direct op. costs per operating day – U.S. ($000s)	$19.57	$19.55
Avg. adjusted gross profit per operating day – U.S. ($000s)	$15.72	$16.17

Cash flow and balance sheet highlights

Q1 2025 operating cash flow $208.1M; capex $161.8M; adjusted FCF $50.7M; cash $225.2M; net debt/Adj. EBITDA ~1.0x LTM .
Q1 shareholder returns: $51M (buybacks $20.3M; dividend $0.08/share) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Drilling Services – Adjusted Gross Profit	Q2 2025	—	Slight sequential decline (legacy contract rate roll-down; seasonal costs)	Lowered
Completion Services – Adjusted Gross Profit	Q2 2025	—	Slight sequential decline; potential late-quarter “white space” if oil stays low	Lowered
Drilling Products – Adjusted Gross Profit	Q2 2025	—	Relatively flat sequentially	Maintained
Other – Adjusted Gross Profit	Q2 2025	—	Decline proportionally following Great Plains partial absorption/divestiture	Lowered
SG&A ($)	Q2 2025	—	≈$65M	New
DD&A ($)	Q2 2025	—	≈$230M	New
Dividend	Q2 2025 payout	$0.08 (Q1)	$0.08 declared; payable Jun 16; record Jun 2	Maintained
FY 2025 Capex	FY 2025	≈$600M (Q4 call)	“Not revisiting”; flexibility retained	Maintained

Earnings Call Themes & Trends

Topic	Q3 2024 (prior-2)	Q4 2024 (prior-1)	Q1 2025 (current)	Trend
Integrated/performance-based model	Launched first fully integrated pad; accretive potential	Targeting more integrated deals; completion of drilling phase ahead of schedule	~10% of work includes integration/performance; initial project exceeded expectations	Expanding adoption
Natural gas basins/LNG	Expect gas activity upside into 2025 as LNG ramps	Gas gear effectively sold out in 2Q–3Q; tight high-end capacity	Early recovery in Haynesville; >80% fleet gas-capable; steady gas outlook	Constructive/earlier-than-expected recovery
Completions pricing/utilization	4Q seasonal slowdown expected; 1H25 recovery	Pricing pressure at year-end; expect stabilization in 1H25	Q1 rebound with high utilization; Q2 slightly lower AGP and possible “white space”	Stabilizing but cautious near term
Drilling dayrates/margins	Term rate churn into 4Q; margins slightly lower	Stable base rates; potential tech-driven margin upside	Slight Q2 AGP decline as legacy rates roll; seasonal costs	Mild near-term pressure
Power/electrification strategy	Evaluating opportunities; disciplined returns	Measured approach; not pursuing commoditized rentals	Case-by-case; focus on differentiated integrated solutions	Disciplined, selective
International products	Growing presence; JV in UAE announced	Ulterra outperformance; international expansion eminent	Canada steady; Middle East upgrade to manufacturing; LatAm growth	Broadening footprint

Management Commentary

“Our Drilling Services technology continues to drive efficiency gains… In Completion Services, utilization across our entire fleet was high… Our Drilling Products segment continues to perform well… we remain focused on execution and outperforming the market.” — CEO Andy Hendricks .
“More than 80% of our active fleet can be powered by natural gas… equipment capable of running on natural gas is effectively sold out.” — CEO on completions tech positioning .
“We expect… Q2 Completion Services adjusted gross profit to decline slightly… we have not seen any change in strategy from our customers [but] could see some white space later in the quarter.” — CFO Andy Smith .
“Net debt… is just 1x trailing 12 months adjusted EBITDA… robust liquidity… expect to generate another year of solid adjusted free cash flow in 2025.” — CEO .

Q&A Highlights

Completion “white space” and Q2 guide: Activity ramped faster than expected in Q1; management embeds conservatism for late Q2 if oil stays low; expecting steady activity otherwise .
Oil-price sensitivity: Larger, better-capitalized customers (≈60% of revenue) imply relative resilience; potential softening if WTI stays low-60s, but high-spec rigs should fare better than low-spec .
Performance-based contracts: Integration/performance now ~10% of work; expected multi-year growth; reduces focus on dayrate metrics as integrated model scales .
Capex and maintenance: FY25 capex ≈$600M; majority maintenance and flexible with activity; drilling maintenance ≈$175M; completions ≈$200M (directional) .
Natural gas basin outlook: Haynesville and other gas plays improved earlier; hedging supports customer health; steady gas-directed activity expected at current prices .

Estimates Context

Q1 2025 vs consensus: Revenue $1,280.5M vs $1,188.0M*; Adjusted EBITDA $251.2M vs $234.6M*; Diluted EPS $0.00 vs -$0.04* .
Implications: Broad-based beat (revenue/EBITDA/EPS) despite management’s slightly softer Q2 guide suggests upward near-term estimate revisions for Q1 realized metrics, with Q2 modeled more cautiously given legacy contract roll-off, seasonal costs, and potential completion “white space.”
*Values retrieved from S&P Global.

Key Takeaways for Investors

Q1 beat on all key metrics demonstrates execution leverage from technology, integrated commercial models, and gas-capable fleet positioning; this should support estimate resilience even as Q2 is guided slightly lower .
Drilling margins are resilient but face modest Q2 pressure from contract re-pricing and seasonal cost upticks; inventory of term contracts (62 rigs in Q2) mitigates volatility .
Completions rebound is real; near-term risk is late-quarter “white space” if oil remains in low-60s, but gas basin strength and high utilization of gas-capable assets underpin medium-term setup into 2H25/2026 .
Strategic pivot to integration/performance-based agreements (now ~10% of work) is a multi-year margin and share opportunity; expect less disclosure of per-rig dayrates as segment-level metrics better reflect integrated operations .
Balance sheet and liquidity (net leverage ~1.0x; undrawn $500M revolver) enable disciplined capex and capital returns (≥50% of adjusted FCF targeted), creating downside protection amid macro uncertainty .
Watch catalysts: continued gas-basin activity recovery, performance bonuses on integrated projects, potential stabilization/firming in completions pricing as high-end, gas-capable capacity remains tight .

Appendix: Additional Detail

Selected income statement and cash flow items (Q1 2025)

Revenue $1,280.5M; Operating income $16.9M; Net income attributable to common $1.0M; Diluted EPS $0.00 .
Operating cash flow $208.1M; Capex $161.8M; Adjusted free cash flow $50.7M .
Dividend $0.08/share declared (payable Jun 16, record Jun 2); Q1 buybacks $20.3M .

Prior quarters (for trend)

Q4 2024: Revenue $1,162.1M; Adjusted EBITDA $225M; Diluted EPS $(0.13) .
Q3 2024: Revenue $1,357.2M; Adjusted EBITDA $275M; Diluted EPS $(2.50) (goodwill impairment/rig retirements) .

Other press releases

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PATTERSON UTI ENERGY INC (PTEN)·Q1 2025 Earnings Summary