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PATTERSON UTI ENERGY INC (PTEN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $1.162B, with a net loss of $52M ($0.13 per share) and adjusted EBITDA of $225M; segments delivered Drilling Services revenue of $408M, Completion Services $651M, Drilling Products $87M, and Other $16M .
  • Management emphasized traction in integrated, performance-based contracts and indicated potential for margin-accretive growth; natural-gas-powered completion equipment is effectively sold out heading into Q2–Q3, setting up tight capacity that could support pricing later in 2025 .
  • 2025 CapEx is guided to ~$600M (down from 2024), with a commitment to return at least 50% of adjusted free cash flow via dividends and buybacks; revolver was refinanced to a new 5-year $500M unsecured facility expiring Jan-2030 .
  • S&P Global consensus estimates were unavailable via our tool at time of analysis; we therefore do not present an “actual vs consensus” comparison. The company’s Q4 press release and call provide the baseline operational context .

What Went Well and What Went Wrong

What Went Well

  • Free cash flow strength and capital returns: 2024 adjusted free cash flow reached $523M; Q4 buybacks and $0.08 dividend continued capital return discipline .
  • Drilling margin resilience: U.S. contract drilling delivered adjusted gross profit per day of $15,700 in Q4; CEO highlighted Tier 1 APEX rig efficiency and performance data integration as drivers .
  • Drilling Products outperformance: Revenue fell <5% in the U.S. despite >10% decline in the industry rig count, reflecting tech differentiation (Ulterra) and service quality; international revenue improved y/y .

What Went Wrong

  • Pricing pressure in Completions: Year-end customer slowdowns and RFP resets pressured pricing; management expects Q2–Q3 to mark the bottom in reported results with potential improvement thereafter .
  • Consolidated profitability: Q4 posted a net loss of $52M; while EBITDA remained solid, GAAP earnings reflect macro pressure and prior non-cash items earlier in the year .
  • White space inefficiencies: Q4 Completions saw sequential white space due to customer budget timing; management expects seasonal recovery and tighter natural gas-powered fleet utilization into Q2–Q3 .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Billions)$1.348 $1.357 $1.162
Diluted EPS ($USD)$0.03 $(2.50) $(0.13)
Net Income ($USD Millions)$11 $(979) $(52)
Adjusted EBITDA ($USD Millions)$324 $275 $225
SegmentQ2 2024Q3 2024Q4 2024
Drilling Services Revenue ($MM)$440 $422 $408
Drilling Services Adjusted Gross Profit ($MM)$179 $171 $163
Completion Services Revenue ($MM)$805 $832 $651
Completion Services Adjusted Gross Profit ($MM)$152 $128 $95
Drilling Products Revenue ($MM)$86 $89 $87
Drilling Products Adjusted Gross Profit ($MM)$40 $42 $37
Other Revenue ($MM)$16 $15 $16
Other Adjusted Gross Profit ($MM)$6 $5 $7
KPI (U.S. Contract Drilling)Q2 2024Q3 2024Q4 2024
Operating Days10,388 9,870 9,617
Avg Rig Revenue/Day ($)$36,430 $36,000 $35,300
Avg Rig Operating Cost/Day ($)$20,230 $19,900 $19,600
Avg Adjusted Rig Gross Profit/Day ($)$16,190 $16,100 $15,700

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
SG&A ($MM)Q1 2025~$65 (Q4 2024 guide) ~$67 Raised
DDA&I ($MM)Q1 2025~$255 (Q4 2024 guide) ~$235 Lowered
U.S. Contract Drilling – Avg Active RigsQ1 2025~106 (Q4 2024 guide) ~106 Maintained
U.S. Contract Drilling – Adj GP/Operating Day ($)Q1 2025Slightly < $15,000 (Q4 guide) ~$15,250 Raised
Completion Services – Adj Gross Profit ($MM)Q1 2025~$85 (Q4 2024 actual guide result) ~$100 Raised
Drilling Products – Adj Gross ProfitQ1 2025Slight increase Q4 vs Q3 Flat vs Q4 Maintained
Other – Revenue/Adj Gross ProfitQ1 2025Flat vs Q3 into Q4 Flat vs Q4 Maintained
CapEx ($MM)FY 2025“Lower than 2024” (no number) ~600 New specific (lower vs 2024)
Dividend ($/share)Q1 2025$0.08 (Q4 payout) $0.08 Maintained
Revolving Credit FacilityPost-Q4$615MM revolver, undrawn (Q3) New unsecured $500MM, 5-year, to Jan-2030 Refinanced/new facility

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Integrated, performance-based contractsFirst integrated drilling + completions arrangement launched; intent to share upside via efficiency and production improvements Traction increasing; potential to reach 10–20% of business over time, with pull-through services and performance bonuses Expanding scope and adoption
Natural gas/LNG outlookExpect modest recovery in 2025, LNG takeaway online; oil stable Gas demand supportive; potential activity pick-up late 2025 into 2026; customers pacing wells behind pipe Medium-term bullish
Completions pricing and capacityStabilizing pricing; selective on work; Tier 2 diesel attrition tightening supply Pricing down y/y after Q4 resets; natural gas-capable fleets sold out in Q2–Q3; any uptick would support pricing Tightening high-spec capacity
Power/mobile power strategyBuilding CNG + field gas blending; microgrids; turbines/recips fueling frac and production; exploring data center projects Cautious deployment focused on high-return projects; unlikely to chase large data center power given capital intensity; focus on integrated E&P site power Disciplined, targeted growth
Capital discipline40% EBITDA-to-FCF conversion; 2024 CapEx below budget; investment-grade credit affirmed 2025 CapEx ~$600M; return ≥50% of adjusted FCF to shareholders; revolver refinanced Continued FCF focus

Management Commentary

  • CEO: “We delivered relatively steady adjusted gross profit per day in U.S. contract drilling… managed year-end operator slowdowns… and delivered results in Drilling Products that outperformed industry activity… We returned significant capital to our shareholders… and reduced our net debt” .
  • CEO on integration: “We recently completed the drilling portion of [our] integrated program, delivering wells significantly faster than historical averages… resulting in performance bonuses… paving the way for a commercial model that captures more performance-driven upside” .
  • CEO on completions technology: “We launched new field gas technology… improve gas quality and blending… expand Emerald 100% natural gas-powered equipment… Direct Drive systems enable fleets to run entirely on natural gas… generating strong commercial interest” .
  • CFO: “Total reported revenue for the quarter was $1.162B… net loss of $52M or $0.13 per share… adjusted EBITDA $225M… adjusted free cash flow $523M in 2024. Q1 SG&A ~$67M; DDA&I ~$235M; Completions adj GP ~$100M” .
  • CFO on balance sheet: “Closed Q4 with $241M cash… refinanced into a new 5-year, $500M unsecured credit facility… expect significant free cash flow again in 2025 and to return at least half via buybacks and dividends” .

Q&A Highlights

  • Performance-based integrated contracts: Management sees potential for the model to become a “more significant part” of the business with financial upside through performance bonuses and service pull-through for mid-tier E&Ps .
  • Completions capacity and pricing: Natural gas-capable fleets effectively sold out in Q2–Q3; pricing negotiated lower in late 2024 but tight capacity should support stabilization and potential improvement later in 2025/2026 .
  • Power strategy: A measured approach; prefer returns from integrated solutions (microgrids, battery backup, CNG/fuel blending) at E&P sites rather than commoditized generator rentals or very large data center projects .
  • Drilling margins: Base rig pricing stable on steady rig count; upside from technology deployments and cost streamlining; Q1 adjusted GP/day guide raised to ~$15,250 .
  • CapEx allocation: ~35% drilling, ~50% completions, balance products/other for 2025, reflecting focus on high-return upgrades and natural-gas-powered assets .

Estimates Context

  • S&P Global consensus estimates were unavailable due to API request limits; as a result, we do not include “actual vs S&P consensus” comparisons. We anchor our analysis on the company’s press release and call disclosures .

Key Takeaways for Investors

  • Integrated, performance-based contracts are gaining traction and can drive margin accretion and service pull-through; management sees potential to reach 10–20% of activity over time .
  • Tight capacity for natural gas-capable fleets (sold out into Q2–Q3) positions Completions for improved pricing leverage if activity ticks up later in 2025/2026; watch LNG timing and Permian gas takeaway normalization .
  • Drilling margin resilience supported by Tier 1 APEX rigs and automation/data analytics; Q1 guide for adjusted GP/day is raised, implying sequential margin stability-to-improvement .
  • 2025 CapEx (~$600M) and FCF focus remain central to the equity story; expect ≥50% adjusted FCF returned to shareholders via buybacks/dividends, preserving capital discipline .
  • Power strategy is a differentiator—expect targeted, high-return deployments (E&P site power, integrated microgrids, CNG/field gas blending), not commoditized rentals or capital-heavy data center power .
  • Near term, seasonal recovery and capacity tightness should aid Completions; medium term, integrated model adoption and natural gas demand tailwinds (LNG, domestic power baseload) support multi-year EPS improvement potential .

Source Documents Read

  • Q4 2024 earnings press release (investor site): Patterson-UTI Energy Reports Financial Results for the Quarter Ended December 31, 2024 .
  • Q4 2024 earnings call transcript: full document .
  • Prior quarter transcripts for trend: Q3 2024 –; Q2 2024 –.
  • Other press release (earnings call scheduling): Patterson-UTI Energy Announces Fourth Quarter Earnings Conference Call and Webcast .

Notes: S&P Global consensus estimates were not retrievable at time of analysis; comparisons to Wall Street consensus are therefore omitted.