Weatherford earnings for the third quarter of 2026 showed stronger margins and cash generation despite a 7% year-over-year revenue decline. The company generated $155 million in adjusted free cash flow and raised its full-year cash conversion outlook.

Key Takeaways

  • Revenue reached $1.143 billion, down 7% year over year but up 3% from the second quarter.
  • Adjusted EBITDA margin rose to 22.2%, while adjusted free cash flow increased 57% year over year.
  • Weatherford raised its annual cash conversion outlook, but expects higher capital spending and interest payments to weigh on fourth-quarter cash flow.

Table of Contents

Weatherford earnings show margin gains despite lower sales

Adjusted EBITDA totaled $254 million, with the 22.2% margin improving by 204 basis points sequentially and 39 basis points from a year earlier. Cash generation also strengthened: adjusted free cash flow represented 61% of adjusted EBITDA, compared with 36.8% in the third quarter of 2025.

Through the first nine months, adjusted free cash flow reached $379 million, up 55% year over year, with conversion of 53%. Weatherford raised its full-year conversion outlook to the high-40% range from the mid- to high-40% range outlined in July.

CEO Girish Saligram said the company aims to add 25 to 75 basis points of margin annually through cost reductions, infrastructure modernization, technology deployment and a shift toward higher-margin, less capital-intensive businesses. He said a mid-20s percentage margin could be achievable in roughly three to four years even with flat activity.

Fourth-quarter growth comes with cash demands

Weatherford forecast fourth-quarter revenue of $1.28 billion to $1.33 billion, adjusted EBITDA of $270 million to $290 million and adjusted free cash flow above $100 million.

The cash flow forecast is below the third-quarter result. CFO Anuj Dhruv attributed most of the difference to a cash interest payment and capital expenditure expected to rise to $70 million–$80 million, compared with $45 million in the third quarter.

Collections from Mexico remain the largest variable for quarterly free cash flow, Dhruv said, although expected receipts are included in the guidance. Adjusted net working capital stood at 29.2% of trailing 12-month revenue, approximately 150 basis points higher sequentially, reflecting NCS consolidation and receivables and inventory timing.

Regional performance remains uneven

Latin American revenue increased 14% sequentially, led by Mexico and the Caribbean, and Weatherford recorded its first Venezuelan revenue in the quarter. Management expects Venezuelan start-up costs to affect fourth-quarter margins as the company hires staff and refurbishes facilities.

Revenue in the Middle East, North Africa and Asia was flat sequentially as the region absorbed the end of the Saudi LSTK contract and the Oman Marmul transition. Management said underlying Middle Eastern service activity had not normalized, with lower rig counts, delayed tenders and operational disruptions.

Weatherford nevertheless expects sequential regional growth in the fourth quarter, supported by year-end product deliveries rather than an assumed recovery in service activity. Revenue in Europe, Sub-Saharan Africa and Russia fell 9% sequentially amid lower activity and a Norwegian labor strike; the region is expected to remain roughly flat in the fourth quarter.

NCS integration and planned debt redemption

North American revenue increased, partly reflecting one month of contribution from NCS. Management said integration was progressing smoothly and reiterated a commitment to at least $15 million in cost synergies within 18 months of closing. Potential revenue synergies remain unquantified.

Weatherford reported approximately $1.2 billion in cash, total liquidity of about $1.8 billion and net leverage of 0.28 times. It returned $47 million to shareholders during the quarter through $19 million in dividends and $28 million in buybacks.

The company also issued notice to redeem all $236 million of its 8.625% senior notes due in 2030 at par. The planned redemption is expected to reduce annualized cash interest expense by approximately $20 million.

Conclusion

Weatherford’s third quarter combined lower annual revenue with stronger margins and cash conversion. Its fourth-quarter outlook points to higher sales, while increased spending, interest payments and the timing of Mexican collections remain important constraints on cash generation.

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