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Weatherford International plc (WFRD)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue fell to $1.34B (-5% q/q, -2% y/y); diluted EPS was $1.50 (down from $2.06 in Q3 and $1.90 y/y), and adjusted EBITDA was $326M (24.3% margin), reflecting sharp Latin America/Mexico activity reductions and pockets of weakness in Europe/SSA/Russia .
  • Management guided Q1 2025 revenue to $1.17–$1.21B and adjusted EBITDA to $245–$265M; FY 2025 revenue to $5.1–$5.35B and adjusted EBITDA to $1.2–$1.35B, with D&A expected down ~$100M and capex ~5% of revenue; tax rate mid-20% for FY 2025 and Q1 in high-30% range .
  • Despite the Q4 shortfall, FY 2024 adjusted EBITDA margin reached 25.1% and adjusted FCF was $524M; net leverage improved to 0.48x and the Board declared a $0.25 quarterly dividend (paid Mar 19, 2025); $49M of buybacks executed in Q4 .
  • Key catalysts: significant Mexico reduction (30–50% decline expected) and Russia/FX pressure weighed on outlook; management emphasized structural cost programs, working capital discipline and targeted technology growth vectors (MPD/Motus, well services, digital) to stabilize margins and cash generation .

What Went Well and What Went Wrong

  • What Went Well

    • Delivered FY 2024 adjusted EBITDA margin of 25.1% and adjusted FCF of $524M, with net leverage improved to 0.48x; Board continued $0.25 dividend and buybacks ($99M cumulative in 2H 2024) .
    • Middle East/North Africa/Asia grew 17% for FY 2024; WCC segment strength (FY WCC adj. EBITDA +24% y/y) supported mix resilience; Saudi expected up in 2025 despite broader market declines .
    • Strategic wins and technology milestones (ADNOC rigless services; KOC MPD; first OptiRoss RFID sleeve in Brazil; multiple international wireline/TRS awards) position pipeline for H2 ramp and beyond .

  • What Went Wrong

    • Q4 underperformed expectations due to a “significant drop” in Latin America activity, particularly Mexico; revenue and EPS declined q/q/y/y, with adjusted EBITDA margin down 88 bps q/q .
    • Russia continued to be a drag given sanctions complexity and FX volatility; management expects further decline in 2025; international Q4 revenue down 6% q/q and 3% y/y .
    • PRI segment softness (Q4 PRI revenue -2% q/q, -6% y/y; margin down 94 bps q/q) from lower activity in Latin America and Europe/SSA/Russia, partly offset by Artificial Lift .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Billions)$1.362 $1.409 $1.341
Diluted EPS ($USD)$1.90 $2.06 $1.50
Operating Income ($USD Millions)$216 $243 $198
Net Income Attributable to Weatherford ($USD Millions)$140 $157 $112
Net Income Margin %10.3% 11.1% 8.4%
Adjusted EBITDA ($USD Millions)$321 $355 $326
Adjusted EBITDA Margin %23.6% 25.2% 24.3%
Cash from Operations ($USD Millions)$375 $262 $249
Adjusted Free Cash Flow ($USD Millions)$315 $184 $162
Capital Expenditures ($USD Millions)$67 $78 $100

Segment Performance

SegmentQ4 2023 Revenue ($MM)Q3 2024 Revenue ($MM)Q4 2024 Revenue ($MM)Q4 2023 Seg Adj EBITDA ($MM)Q3 2024 Seg Adj EBITDA ($MM)Q4 2024 Seg Adj EBITDA ($MM)Q4 2023 Margin %Q3 2024 Margin %Q4 2024 Margin %
DRE$382 $435 $398 $97 $111 $96 25.4% 25.5% 24.1%
WCC$480 $509 $505 $131 $151 $148 27.3% 29.7% 29.3%
PRI$386 $371 $364 $88 $83 $78 22.8% 22.4% 21.4%

Key KPIs

KPIQ4 2023Q3 2024Q4 2024
North America Revenue ($MM)$248 $266 $261
International Revenue ($MM)$1,114 $1,143 $1,080
Latin America Revenue ($MM)$342 $358 $312
MENA/Asia Revenue ($MM)$547 $542 $542
Europe/SSA/Russia Revenue ($MM)$225 $243 $226
Total Debt ($MM)$1,883 $1,648 $1,634
Cash & Equivalents ($MM)$958 $920 $916
Net Debt ($MM)$820 $670 $659
Net Leverage (x)0.69x 0.49x 0.48x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance / ActualChange
RevenueQ4 2024“Flat to up low single digits” sequential in Q4 $1.341B (down 5% q/q) Lower vs prior guidance
Adj. EBITDA MarginQ4 2024~25% 24.3% Maintained within range (slightly below ~25%)
Adj. EBITDA MarginFY 2024“Slightly above 25%” 25.1% Delivered above guidance
Adjusted Free Cash FlowFY 2024>$500M $524M Delivered above guidance
RevenueQ1 2025N/A$1.17–$1.21B Initiated
Adjusted EBITDAQ1 2025N/A$245–$265M Initiated
RevenueFY 2025N/A$5.1–$5.35B Initiated
Adjusted EBITDAFY 2025N/A$1.2–$1.35B Initiated
Tax RateFY 2025N/AMid-20% (Q1 high-30%) Initiated
D&AFY 2025N/ADown ~$100M y/y Initiated
CapexFY 2025~5% of revenue (company long-term target) ~5% of revenue; H1 elevated due to Brazil subsea projects Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Mexico/LATAM activityQ2: Social unrest in Colombia; project delays in Mexico; LATAM -5% q/q . Q3: LATAM delays broadly felt; caution on near-term .“Significant drop” in LATAM, especially Mexico; sizing business down; expect 30–50% decline, main Q1 impact .Deteriorating entering 2025
MENA/Asia strengthQ2: MENA/Asia +29% y/y; strong WCC/Completions . Q3: MENA/Asia +15% y/y; continued resilience .FY 2024 +17% y/y; Saudi expected up in 2025 despite market declines .Structural positive
Russia sanctions/FXQ3: Complex, compliant operations; % of rev down; FX volatility .Continued decline expected in 2025; December ruble weakness added pressure .Ongoing headwind
MPD/Motus technologyQ2/Q3: Victus MPD deployments; Modus packages built/trials completed .Modus deployed across regions; expecting significant uptick contribution in 2025 .Adoption expanding
Digital/AI (Datagration)Q3: Acquired Datagration (PetroVisor/EcoVisor); integration with SCADA (Cygnet) and ForeSite .Digital cited as margin-accretive growth vector; unified data model accelerates customer optimization .Growing strategic focus
Working capital/FCFQ2: Net WC efficiency; target ≤25% of revenue . Q3: WC % LTM ~25.8%; liquidity ~$1.3B .FY 2024 adj FCF $524M; WC improvements; Q1 FCF near breakeven; aim 50% conversion over time .Sustained discipline
Shareholder returnsQ2: Initiated $0.25 dividend and $500M buybacks . Q3: $18M dividend; $50M buybacks .Q4: $18M dividend; $49M buybacks; cumulative $99M; Board declared $0.25 dividend payable Mar 19, 2025 .Continued execution
North America marginsQ2/Q3: NA challenged; mix improvements; pricing discipline .NA margins up despite flat/down market via cost, pricing and mix actions .Improving margins

Management Commentary

  • CEO on Q4 shortfall and margin trajectory: “We cannot fight math when revenues decline... Despite the shortfall, we delivered full year adjusted EBITDA margins... 25.1%...” and highlighted structural cost optimization and targeted growth vectors (MPD/Motus, well services, digital) .
  • CFO on 2025 and Q1 2025 guidance: “We are expecting $1.17–$1.21B in revenues with adjusted EBITDA of $245–$265M... FY 2025 revenues of $5.1–$5.35B, adjusted EBITDA of $1.2–$1.35B... D&A to decline ~$100M... tax mid-20%” .
  • CEO on regional mix: “Saudi will be up... not fully offset Mexico/Russia... underpenetration gives opportunity to grow despite rig declines” .
  • CEO on Russia: operations remain compliant with sanctions and local laws; business percentage declined from ~7.4% to ~5.4% over two years; FX pressure (ruble) adds headwinds .

Q&A Highlights

  • Mexico outlook: Guidance prudently sizes activity down 30–50%; not assuming a second-half ramp; line-of-sight to Q2 and H2 contract starts elsewhere; upside if Mexico rebounds .
  • Saudi/MENA growth: Underpenetrated areas and product-focused presence drive expected growth; broader Middle East stable with integrated contracts ramping .
  • Russia headwinds: Continued decline expected due to sanctions complexity and FX; no technology shipments since Feb 2022 .
  • North America margins: Improved via cost base actions, pricing discipline supported by technology and service quality, and targeted share gains in new basins/products .
  • Buyback approach: Programmatic buybacks to offset dilution; opportunistic repurchases informed by market signals; balanced with debt paydown and selective M&A .

Estimates Context

  • We attempted to retrieve S&P Global consensus for Q4 2024 EPS and revenue but were unable to access due to system request limits; therefore, we cannot present beat/miss vs Wall Street consensus in this report. Values would normally be retrieved from S&P Global and compared to actuals. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Q4 was a reset: revenue/EPS down on an abrupt Mexico slowdown; FY 2024 still delivered >25% EBITDA margin and $524M FCF, underscoring execution discipline .
  • 2025 topline guide implies decline vs 2024; focus shifts to margin preservation, cost programs, and cash conversion with D&A down ~$100M and capex ~5% supporting FCF resilience .
  • Growth vectors: MPD/Motus, rigless well services, and digital (Datagration + Cygnet + ForeSite) could drive mix and margin accretion despite softer activity in select regions .
  • Regional mix matters: MENA/Asia strength and Saudi growth help offset Mexico/Russia drag; LATAM recovery is a key swing factor to watch in H2 .
  • Balance sheet and returns: Net leverage ~0.48x and ongoing buybacks/dividends provide downside support; liquidity ~$1.3B enables flexibility in a transitional year .
  • Watch Q1: Guidance points to trough revenues/FCF; management expects sequential revenue increases in Q2 and second-half ramp from contract starts .
  • Execution risks: Russia FX/sanctions, Mexico budget actions, and UK offshore activity reductions; offset by structural cost actions and targeted technology-led share gains .

Bolded items indicate notable surprises versus prior narrative/guidance where applicable.