Helmerich & Payne, Inc. (NYSE:HP)

Operating and Financial Highlights for the Quarter Ended December 31, 2025

The Company reported consolidated net loss of $(97) million, or $(0.98) per share, which includes the impact of a non-cash impairment charge of $103 million. Adjusted for this and other non-recurring one-time items, adjusted earnings⁽¹⁾ were $(14) million, or $(0.15) per share.
North America Solutions (NAS) reported operating income of $36 million for the quarter, compared with $118 million in the prior quarter. These results include a one-time impairment of $98 million. NAS generated direct margins⁽²⁾ of $239 million, resulting in direct margin⁽²⁾ per day of $18,193, reflecting strong, sector-leading margin performance in the North American land market.
The company successfully deployed FlexRobotics^TM Technology system on a rig for a Super Major in the Permian Basin.
International Solutions reported an operating loss of $(55) million for the quarter, an improvement from a loss of $(76) million in the prior quarter. The segment again exceeded its guidance midpoint expectations, delivering direct margins⁽²⁾ of approximately $29 million.
Consolidated adjusted EBITDA⁽³⁾ totaled $230 million.
The Company has repaid $260 million on its $400 million term loan as of the end of January and continues to expect full repayment by the end of the third fiscal quarter of 2026.
Approximately $25 million was returned to shareholders through the Company's ongoing dividend program.

Management Commentary

"During the first fiscal quarter, the Company executed with discipline, delivering strong operational and financial results across all business segments. These results demonstrate our ability to generate consistent operational performance and advance our strategic priorities in a dynamic market environment," commented CEO John Lindsay.

"Our NAS segment continued to hold its industry-leading position, supported by solid financial performance and strong execution. With a presence across all major U.S. basins, the team continued to deliver reliable, high‑quality solutions that support customer programs. We effectively managed basin‑level activity churn, including in the Permian, where we maintain leading market share by delivering reliable results and differentiated offerings."

"Notably, our new FlexRobotics^TM Technology was successfully deployed on a rig for a Super Major in the Permian Basin, supporting the drilling of multiple pads and delivering strong, reliable rig-floor performance. We are seeing growing customer interest in adding additional units to the fleet. Also significant, NAS technology adoption continues to increase year‑over‑year, with deployment now occurring on nearly every active rig. As customers continue to recognize the efficiencies these technologies provide, we expect adoption to remain strong and further deepen alignment with our customers."

"For our International Solutions segment, the first fiscal quarter marked continued progress in advancing our global strategy and bringing U.S. unconventional expertise to key international markets," Lindsay said. "With rig reactivations underway in Saudi Arabia, we expect startups to be completed by mid‑2026. Discussions with national and international oil companies across our core regions remain encouraging, reinforcing our confidence in the value our drilling solutions deliver worldwide."

"Our Offshore Solutions segment delivered stable and consistent performance in the first fiscal quarter. The business continues to generate consistent cash flows driven by low capital intensity, strong customer relationships, and activity across the Gulf of America, the Caspian Sea, Norway and UK North Sea, Africa, and Canada. With approximately 30% of the global platform operations and maintenance market, we remain encouraged by the segment's outlook."

Senior Vice President and CFO Kevin Vann added, "As we progress through fiscal 2026, our disciplined approach to capital deployment continues to support strong free cash flow and ongoing balance sheet improvement. We have repaid $260 million on the $400 million term loan and remain on track to retire the remaining balance ahead of schedule using free cash flow. This progress highlights our commitment to prudent capital allocation."

Lindsay concluded, "We remain encouraged by the opportunities ahead through the remainder of 2026 and beyond. Our expanded global scale and the continued strengthening of our competitive position give me confidence in the path forward. In NAS, our differentiated solutions, super‑spec fleet investments, peer‑leading cost structure, and steady technology adoption provide meaningful durability. H&P is anchored by a strong safety culture and a customer‑focused approach, all driven by a workforce that is second to none in this industry. As we enter this new chapter of leadership, I am confident that Trey and his team are well equipped to continue delivering long-term term value for shareholders. We look forward to building on this momentum throughout the year."

The Company also noted that, as previously announced, John Lindsay plans to retire in March, with a leadership transition underway and no change to the Company's strategic direction or financial priorities.

Operating Segment Results for the First Quarter of Fiscal Year 2026

North America Solutions: Realized operating income of $36 million, compared with $118 million in the previous quarter. These results include a one-time impairment of $98 million. Supported by consistent operational execution direct margin⁽²⁾ slightly exceeded the midpoint of guidance at approximately $239 million, versus $242 million in the prior quarter. On a per day basis, direct margin averaged approximately $18,193 with 143 rigs operating, demonstrating the durability of the active fleet and reinforcing our position as a peer-leading margin generator.

International Solutions: The segment reported an operating loss of $(55) million, compared with a loss of approximately $(76) million in the previous quarter. Direct margin⁽²⁾ again exceeded the midpoint of guidance expectations, totaling approximately $29 million versus approximately $30 million in the prior quarter, supported by steady activity levels within the segment.

Offshore Solutions: Contributed operating income of approximately $16 million, compared with approximately $20 million in the previous quarter. These results include a one-time impairment of $2 million. Direct margin⁽²⁾ for the quarter was approximately $31 million, compared with approximately $35 million in the prior quarter, providing consistent and reliable cash flow contributions.

Select Items⁽⁴⁾ Included in Net Loss per Diluted Share

First quarter of fiscal year 2026 net loss of $(0.98) per diluted share included a net impact of $(0.83) per share in after-tax gains and losses comprised of the following:

$0.01 of non-cash after-tax gain related to the change in actuarial assumptions on estimated liabilities
$0.01 of non-cash after-tax gain related to investment securities
$(0.02) of after-tax loss related to restructuring charges
$(0.03) of after-tax loss related to acquisition transaction costs
$(0.80) of non-cash after-tax loss related to impairment

Fourth quarter of fiscal year 2025 net loss of $(0.58) per diluted share included a net impact of $(0.57) per share in after-tax losses comprised of the following:

$0.03 of non-cash after-tax gain related to the change in actuarial assumptions on estimated liabilities
$(0.05) of after-tax loss related to transaction and integration costs
$(0.07) of after-tax loss related to restructuring charges
$(0.08) of after-tax loss related to a credit loss expense associated with a long-term note receivable
$(0.12) of non-cash after-tax loss related to impairment
$(0.28) of non-cash after-tax loss related to investment securities

Operational Outlook for the Second Quarter of Fiscal Year 2026

The guidance below represents our expectations as of the date of this release.

North America Solutions:

Direct margin⁽²⁾ between $205 million and $230 million
Average rig count of approximately 132 to 138 contracted rigs

International Solutions:

Direct margin⁽²⁾ between $12 million and $22 million
Average rig count of approximately 57 to 63 contracted rigs⁽⁵⁾

Offshore Solutions:

Direct margin⁽²⁾ between $20 million and $30 million
Average management contracts and contracted platform rigs of approximately 30 to 35

Other:

Direct margin⁽²⁾ contribution from the Company's other operations between $3 million and $8 million

Other Estimates for Fiscal Year 2026

Depreciation for fiscal year 2026 is now expected to be approximately $700 million
Research and development expenses for fiscal year 2026 are still expected to be roughly $25 million
General and administrative expenses for fiscal year 2026 are still expected to be approximately $265 million to $285 million
Cash taxes to be paid in fiscal year 2026 are still expected to be approximately $95 million to $145 million
Interest expense for fiscal year 2026 is still expected to be approximately $100 million

Conference Call

A conference call will be held at 11 a.m. (ET), Thursday, February 5, 2026, with John Lindsay, CEO, Trey Adams, President, Kevin Vann, Senior Vice President and CFO, and other management team members to discuss the Company's first quarter fiscal year 2026 results. Dial-in information for the conference call is (800)-343-4136 for domestic callers or (203)-518-9843 for international callers. The call access code is ‘Helmerich'. Participants can listen to the live webcast of the conference call and access the accompanying earnings presentation by visiting our website at www.hpinc.com. Navigate to the "Investors" section, click on "News and Events – Events & Presentations," and select the event to access the webcast and materials.

About Helmerich & Payne, Inc.

Founded in 1920, Helmerich & Payne, Inc. (H&P) (NYSE:HP) is committed to delivering industry leading levels of drilling productivity and reliability. H&P operates with the highest level of integrity, safety and innovation to deliver superior results for its customers and returns for shareholders. Through its subsidiaries, the Company designs, fabricates and operates high-performance drilling rigs in conventional and unconventional plays around the world. H&P also develops and implements advanced automation, directional drilling and survey management technologies. As of February 4, 2026, H&P's fleet includes 203 land rigs in the United States, 131 international land rigs and four offshore platform rigs, plus operating 31 offshore labor contracts. For more information, see H&P online at www.hpinc.com.

Forward-Looking Statements

This release includes "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and such statements are based on current expectations and assumptions that are subject to risks and uncertainties. All statements other than statements of historical facts included in this release, including, without limitation, outlook for fiscal 2026, the Company's business strategy, future financial position, operations outlook, future cash flow, future use of generated cash flow, dividend amounts and timing, amounts of any future dividends, investments, active rig count projections, projected costs and plans, objectives of management for future operations, contract terms, financing and funding, debt reduction plans, capex spending and budgets, outlook for domestic and international markets, future commodity prices, and future customer activity and relationships are forward-looking statements. For information regarding risks and uncertainties associated with the Company's business, please refer to the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections and other disclosures in the Company's SEC filings, including but not limited to its annual report on Form 10‑K and quarterly reports on Form 10‑Q. As a result of these factors, Helmerich & Payne, Inc.'s actual results may differ materially from those indicated or implied by such forward-looking statements. Investors are cautioned not to put undue reliance on such statements. We undertake no duty to publicly update or revise any forward-looking statements, whether as a result of new information, changes in internal estimates, expectations or otherwise, except as required under applicable securities laws.

Helmerich & Payne uses its Investor Relations website as a channel of distribution for material company information. Such information is routinely posted and accessible on its Investor Relations website at www.hpinc.com. Information on our website is not part of this release.

Note Regarding Trademarks. Helmerich & Payne, Inc. owns or has rights to the use of trademarks, service marks and trade names that it uses in conjunction with the operation of its business. Some of the trademarks that appear in this release or otherwise used by H&P include FlexRig and FlexRobotics, which may be registered or trademarked in the United States and other jurisdictions.

(1) Adjusted net income, which is considered a non-GAAP metric, is defined as net income (loss), excluding the impact of 'select items' which management defines as certain items that do not reflect the ongoing performance of our core business operations. Adjusted net income is included as supplemental disclosure as management uses it to assess and understand current operational performance, especially in analyzing historical trends which are used in forecasting future period results. For this reason, we believe this measure will be useful information to investors. The presence of non-GAAP metrics is not intended to suggest that such measures should be considered as a substitute for certain GAAP metrics and, given that not all companies define adjusted net income the same way, this financial measure may not be comparable to similarly titled metrics disclosed by other companies. See Non-GAAP Measurements for a reconciliation of net income (loss) to adjusted net income.

(2) Direct margin, which is considered a non-GAAP metric, is defined as operating revenues (less reimbursements) less direct operating expenses (less reimbursements) and is included as a supplemental disclosure. We believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time. See Non-GAAP Measurements for a reconciliation of segment operating income (loss) to direct margin. Expected direct margin for the first quarter of fiscal 2026 is provided on a non-GAAP basis only because certain information necessary to calculate the most comparable GAAP measure is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of certain items. Therefore, as a result of the uncertainty and variability of the nature and amount of future items and adjustments, which could be significant, we are unable to provide a reconciliation of expected direct margin to the most comparable GAAP measure without unreasonable effort.

(3) Adjusted EBITDA is considered to be a non-GAAP metric. Adjusted EBITDA is defined as net income (loss) before taxes, depreciation and amortization, gains and losses on asset sales, other income and expense - which includes interest income and interest expense, and excludes the impact of 'select items' which management defines as certain items that do not reflect the ongoing performance of our core business operations. Adjusted EBITDA is included as supplemental disclosure as management uses it to assess and understand current operational performance, especially in analyzing historical trends which are used in forecasting future period results. For this reason, we believe this measure will be useful to information to investors. The presence of non-GAAP metrics is not intended to suggest that such measures should be considered as a substitute for certain GAAP metrics and, given that not all companies define Adjusted EBITDA the same way, this financial measure may not be comparable to similarly titled metrics disclosed by other companies. See Non-GAAP Measurements for a reconciliation of net income to Adjusted EBITDA.

(4) Select items are considered non-GAAP metrics and are included as a supplemental disclosure as the Company believes identifying and excluding select items is useful in assessing and understanding current operational performance, especially in making comparisons over time involving previous and subsequent periods and/or forecasting future periods results. Select items are excluded as they are deemed to be outside the Company's core business operations. See Non-GAAP Measurements.

(5) Does not include 24 rigs that have either suspended operations or have been notified to suspend operations in Saudi Arabia

Interim Financial Information

Prior to the three months ended March 31, 2025, foreign currency exchange gains and losses were presented in the operating costs and expense line items to which they relate, namely within Drilling services operating expenses, on our Unaudited Condensed Consolidated Statements of Operations. To conform with the current period presentation, we reclassified amounts previously presented in separate line items within operating costs and expenses to the Foreign currency exchange gain (loss) line on our Unaudited Condensed Consolidated Statements of Operations for the three months ended December 31, 2025. The impact of this change was not material to any period presented.

HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	Three Months Ended
(in thousands, except per share amounts)	December 31,			September 30,			December 31,
(in thousands, except per share amounts)		2025			2025			2024
OPERATING REVENUES
Drilling services	$	981,125		$	990,211		$	674,613
Other		35,901			21,537			2,689
		1,017,026			1,011,748			677,302
OPERATING COSTS AND EXPENSES
Drilling services operating expenses, excluding depreciation and amortization		682,780			694,611			410,916
Other operating expenses		31,260			20,319			1,156
Depreciation and amortization		181,919			188,857			99,080
Research and development		6,646			7,567			9,359
Selling, general and administrative		70,444			77,645			63,098
Acquisition transaction costs		3,405			5,677			10,535
Asset impairment charges		103,086			18,928			—
Restructuring charges		1,591			7,450			—
Gain on reimbursement of drilling equipment		(6,120	)		(7,249	)		(9,403	)
Other (gain) loss on sale of assets		1,926			(595	)		1,673
		1,076,937			1,013,210			586,414
OPERATING INCOME (LOSS)		(59,911	)		(1,462	)		90,888
Other income (expense)
Interest and dividend income		2,758			3,353			21,741
Interest expense		(25,607	)		(27,972	)		(22,298	)
Gain (loss) on investment securities		929			(36,461	)		(13,367	)
Foreign currency exchange gain (loss)		27			6,455			(905	)
Other		(1,926	)		(5,985	)		360
		(23,819	)		(60,610	)		(14,469	)
Income (loss) before income taxes		(83,730	)		(62,072	)		76,419
Income tax expense (benefit)		11,201			(6,265	)		21,647
NET INCOME (LOSS)	$	(94,931	)	$	(55,807	)	$	54,772
Net income attributable to non-controlling interest		1,775			1,556			—
NET INCOME (LOSS) ATTRIBUTABLE TO HELMERICH & PAYNE, INC.	$	(96,706	)	$	(57,363	)	$	54,772

Earnings (loss) per share attributable to Helmerich & Payne, Inc:
Basic	$	(0.98	)	$	(0.58	)	$	0.55
Diluted	$	(0.98	)	$	(0.58	)	$	0.54

Weighted average shares outstanding:
Basic		99,544			99,441			98,867
Diluted		99,544			99,441			99,159

HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
	December 31,			September 30,
(in thousands except share data and share amounts)		2025			2025
ASSETS
Current Assets:
Cash and cash equivalents	$	247,195		$	196,848
Restricted cash		30,884			27,412
Short-term investments		21,775			21,496
Accounts receivable, net of allowance of $20,206 and $19,647, respectively		726,819			782,644
Inventories of materials and supplies, net		324,814			324,326
Prepaid expenses and other, net		85,030			97,518
Assets held-for-sale		25,820			15,231
Total current assets		1,462,337			1,465,475

Investments, net		70,538			68,198
Property, plant and equipment, net		4,100,077			4,313,074
Other Noncurrent Assets:
Goodwill		182,576			182,854
Intangible assets, net		463,082			485,540
Operating lease right-of-use assets		117,294			123,598
Restricted cash		1,429			1,640
Other assets, net		61,763			65,359
Total other noncurrent assets		826,144			858,991

Total assets	$	6,459,096		$	6,705,738

LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	188,312		$	217,923
Dividends payable		25,417			25,199
Accrued liabilities		501,264			564,855
Current portion of long-term debt, net		6,859			6,859
Total current liabilities		721,852			814,836

Noncurrent Liabilities:
Long-term debt, net		2,026,314			2,057,084
Deferred income taxes		631,121			624,000
Retirement benefit obligation		104,795			109,864
Other		272,738			270,616
Total noncurrent liabilities		3,034,968			3,061,564

Shareholders' Equity:
Common stock, 0.10 par value, 160,000,000 shares authorized, 112,222,865 shares issued as of December 31, 2025 and September 30, 2025, and 99,849,488 and 99,446,577 shares outstanding as of December 31, 2025 and September 30, 2025, respectively		11,222			11,222
Preferred stock, no par value, 1,000,000 shares authorized, no shares issued		—			—
Additional paid-in capital		499,943			513,050
Retained earnings		2,496,928			2,619,090
Accumulated other comprehensive income (loss)		42,680			44,964
Treasury stock, at cost, 12,373,377 shares and 12,776,288 shares as of December 31, 2025 and September 30, 2025, respectively		(447,763	)		(463,536	)
Non-controlling interest		99,266			104,548
Total shareholders' equity		2,702,276			2,829,338
Total liabilities and shareholders' equity	$	6,459,096		$	6,705,738

HELMERICH & PAYNE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	Three Months Ended December 31,
(in thousands)		2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(94,931	)	$	54,772
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		181,919			99,080
Asset impairment charge		103,086			—
Amortization of debt discount and debt issuance costs		1,250			2,390
Stock-based compensation		9,287			6,851
Gain (loss) on investment securities		(929	)		13,367
Gain on reimbursement of drilling equipment		(6,120	)		(9,403	)
Other loss on sale of assets		1,926			1,673
Deferred income tax		7,182			(9,923	)
Other		(2,345	)		(381	)
Changes in assets and liabilities		(17,896	)		(68	)
Net cash provided by operating activities		182,429			158,358

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(67,565	)		(106,485	)
Purchase of short-term investments		(18,019	)		(95,956	)
Purchase of long-term investments		—			(646	)
Proceeds from sale of short-term investments		16,645			242,920
Insurance proceeds from involuntary conversion		—			698
Proceeds from asset sales		11,020			12,120
Other		(374	)		—
Net cash provided by (used in) investing activities		(58,293	)		52,651

CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid		(25,238	)		(25,021	)
Distributions to non-controlling interests		(7,000	)		—
Debt issuance costs		—			(1,216	)
Payments for employee taxes on net settlement of equity awards		(5,835	)		(6,913	)
Payments on unsecured long-term debt		(30,000	)		—
Other		(1,715	)		—
Net cash used in financing activities		(69,788	)		(33,150	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(740	)		—
Net increase in cash, cash equivalents and restricted cash		53,608			177,859
Cash, cash equivalents and restricted cash, beginning of period		225,900			1,528,660
Cash, cash equivalents and restricted cash, end of period	$	279,508		$	1,706,519

HELMERICH & PAYNE, INC.
SEGMENT REPORTING
	Three Months Ended
	December 31,			September 30,			December 31,
(in thousands, except operating statistics)		2025			2025			2024
NORTH AMERICA SOLUTIONS
Operating revenues	$	563,938		$	572,274		$	598,145
Direct operating expenses		325,133			330,235			332,347
Depreciation and amortization		84,244			88,248			88,336
Research and development		6,408			7,580			9,440
Selling, general and administrative expense		14,022			25,781			15,809
Asset impairment charges		97,922			—			—
Restructuring charges		—			2,272			—
Segment operating income	$	36,209		$	118,158		$	152,213
Financial Data and Other Operating Statistics^1:
Direct margin (Non-GAAP)²	$	238,805		$	242,039		$	265,798
Revenue days³		13,126			12,999			13,708
Average active rigs⁴		143			141			149
Number of active rigs at the end of period⁵		139			144			148
Number of available rigs at the end of period		203			223			225
Reimbursements of "out-of-pocket" expenses	$	72,797		$	71,289		$	68,426

INTERNATIONAL SOLUTIONS
Operating revenues		234,288		$	241,234		$	47,480
Direct operating expenses		205,573			211,716			54,428
Depreciation and amortization		78,121			90,102			4,828
Selling, general and administrative expense		4,145			4,964			2,708
Acquisition transaction costs		436			1,234			—
Asset impairment charges		—			4,368			—
Restructuring charges		1,318			4,565			—
Segment operating loss	$	(55,305	)	$	(75,715	)	$	(14,484	)
Financial Data and Other Operating Statistics¹:
Direct margin (Non-GAAP)²	$	28,715		$	29,518		$	(6,948	)
Revenue days³		5,444			5,691			1,689
Average active rigs⁴		59			62			18
Number of active rigs at the end of period⁵		59			61			20
Number of available rigs at the end of period		131			137			30
Reimbursements of "out-of-pocket" expenses	$	11,768		$	12,720		$	2,119

OFFSHORE SOLUTIONS
Operating revenues	$	188,282		$	180,327		$	29,210
Direct operating expenses		157,280			145,566			22,661
Depreciation and amortization		10,820			10,023			1,980
Selling, general and administrative expense		1,044			1,297			1,064
Acquisition transaction costs		573			2,911			—
Asset impairment charges		2,128			—			—
Restructuring charges		—			237			—
Segment operating income	$	16,437		$	20,293		$	3,505
Financial Data and Other Operating Statistics¹:
Direct margin (Non-GAAP)²	$	31,002		$	34,761		$	6,549
Revenue days³		276			276			276
Average active rigs⁴		3			3			3
Number of active rigs at the end of period⁵		3			3			3
Number of available rigs at the end of period		4			7			7
Reimbursements of "out-of-pocket" expenses	$	39,664		$	29,458		$	7,225

(1)		These operating metrics and financial data, including average active rigs, are provided to allow investors to analyze the various components of segment financial results in terms of activity, utilization and other key results. Management uses these metrics to analyze historical segment financial results and as the key inputs for forecasting and budgeting segment financial results.
(2)		Direct margin, which is considered a non-GAAP metric, is defined as operating revenues less direct operating expenses and is included as a supplemental disclosure because we believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time. See — Non-GAAP Measurements below for a reconciliation of segment operating income (loss) to direct margin.
(3)		Defined as the number of contractual days during the reporting period in which revenue was recognized from Company owned rigs. This metric excludes revenue days associated with leased rigs.
(4)		Active rigs generate revenue for the Company; accordingly, 'average active rigs' represents the average number of rigs generating revenue during the applicable time period. This metric is calculated by dividing revenue days by total days in the applicable period (i.e. 92 days for the three months ended December 31, 2025, September 30, 2025, and December 31, 2024.)
(5)		Defined as the number of contractual days for owned and leased rigs with recognized revenue for during the period.

Segment operating income (loss) for all segments is a non-GAAP financial measure of the Company's performance, as it excludes gain on reimbursement of drilling equipment, other gain (loss) on sale of assets, corporate selling, general and administrative costs, corporate depreciation, corporate acquisition transaction costs, corporate asset impairment charges, and corporate restructuring charges. The Company considers segment operating income (loss) to be an important supplemental measure of operating performance for presenting trends in the Company's core businesses. This measure is used by the Company to facilitate period-to-period comparisons in operating performance of the Company's reportable segments in the aggregate by eliminating items that affect comparability between periods. The Company believes that segment operating income (loss) is useful to investors because it provides a means to evaluate the operating performance of the segments and the Company on an ongoing basis using criteria that are used by our internal decision makers. Additionally, it highlights operating trends and aids analytical comparisons. However, segment operating income (loss) has limitations and should not be used as an alternative to operating income or loss, a performance measure determined in accordance with GAAP, as it excludes certain costs that may affect the Company's operating performance in future periods.

The following table reconciles operating income (loss) per the information above to income (loss) before income taxes as reported on the Unaudited Condensed Consolidated Statements of Operations:

	Three Months Ended
	December 31,			September 30,			December 31,
(in thousands)		2025			2025			2024
Operating income (loss)
North America Solutions	$	36,209		$	118,158		$	152,213
International Solutions		(55,305	)		(75,715	)		(14,484	)
Offshore Solutions		16,437			20,293			3,505
Other		(1,223	)		(32,792	)		774
Eliminations		(795	)		(1,752	)		102
Segment operating income (loss)	$	(4,677	)	$	28,192		$	142,110
Gain on reimbursement of drilling equipment		6,120			7,249			9,403
Other gain (loss) on sale of assets		(1,926	)		595			(1,673	)
Corporate selling, general and administrative costs, corporate depreciation, corporate acquisition transaction costs, corporate asset impairment charges, and corporate restructuring charges		(59,428	)		(37,498	)		(58,952	)
Operating income (loss)	$	(59,911	)	$	(1,462	)	$	90,888
Other income (expense):
Interest and dividend income		2,758			3,353			21,741
Interest expense		(25,607	)		(27,972	)		(22,298	)
Gain (loss) on investment securities		929			(36,461	)		(13,367	)
Foreign currency exchange gain (loss)		27			6,455			(905	)
Other		(1,926	)		(5,985	)		360
Total other income (expense)		(23,819	)		(60,610	)		(14,469	)
Income (loss) before income taxes	$	(83,730	)	$	(62,072	)	$	76,419

NON-GAAP MEASUREMENTS

NON-GAAP RECONCILIATION OF SELECT ITEMS AND ADJUSTED NET LOSS(**)

	Three Months Ended December 31, 2025
(in thousands, except per share data)	Pretax		Tax Impact		Net			EPS
Net loss (GAAP basis)					$	(96,706	)	$	(0.98	)
(-) Changes in actuarial assumptions on estimated liabilities	1,607		365			1,242			0.01
(-) Gain on investment security	929		211			718			0.01
(-) Restructuring charges	(1,591	)	—			(1,591	)		(0.02	)
(-) Acquisition transaction costs	(3,405	)	(386	)		(3,019	)		(0.03	)
(-) Impairment expense	(103,086	)	(23,401	)		(79,685	)		(0.80	)
Adjusted net loss					$	(14,371	)	$	(0.15	)

	Three Months Ended September 30, 2025
(in thousands, except per share data)	Pretax		Tax Impact		Net			EPS
Net loss (GAAP basis)					$	(57,363	)	$	(0.58	)
(-) Changes in actuarial assumptions on estimated liabilities	3,864		877			2,987			0.03
(-) Acquisition transaction costs	(5,677	)	(680	)		(4,997	)		(0.05	)
(-) Restructuring charges	(7,450	)	(595	)		(6,855	)		(0.07	)
(-) Credit loss expense associated with long-term note receivable	(9,878	)	(2,242	)		(7,636	)		(0.08	)
(-) Impairment expense	(11,450	)	—			(11,450	)		(0.12	)
(-) Loss on investment security	(36,461	)	(8,277	)		(28,184	)		(0.28	)
Adjusted net loss					$	(1,228	)	$	(0.01	)

^(**)The Company believes identifying and excluding select items is useful in assessing and understanding current operational performance, especially in making comparisons over time involving previous and subsequent periods and/or forecasting future period results. Select items are excluded as they are deemed to be outside of the Company's core business operations.

NON-GAAP RECONCILIATION OF DIRECT MARGIN

Direct margin is considered a non-GAAP metric. We define "direct margin" as operating revenues (less reimbursements) less direct operating expenses (less reimbursements). Direct margin is included as a supplemental disclosure because we believe it is useful in assessing and understanding our current operational performance, especially in making comparisons over time. Direct margin is not a substitute for financial measures prepared in accordance with GAAP and should therefore be considered only as supplemental to such GAAP financial measures.

The following table reconciles direct margin to segment operating income (loss), which we believe is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to direct margin.

	Three Months Ended
	December 31,			September 30,			December 31,
(in thousands)		2025			2025			2024
NORTH AMERICA SOLUTIONS
Segment operating income	$	36,209		$	118,158		$	152,213
Add back:
Depreciation and amortization		84,244			88,248			88,336
Research and development		6,408			7,580			9,440
Selling, general and administrative expense		14,022			25,781			15,809
Asset impairment charge		97,922			—			—
Restructuring charges		—			2,272			—
Direct margin (Non-GAAP)	$	238,805		$	242,039		$	265,798

INTERNATIONAL SOLUTIONS
Segment operating loss	$	(55,305	)	$	(75,715	)	$	(14,484	)
Add back:
Depreciation and amortization		78,121			90,102			4,828
Selling, general and administrative expense		4,145			4,964			2,708
Acquisition transaction costs		436			1,234			—
Asset impairment charge		—			4,368			—
Restructuring charges		1,318			4,565			—
Direct margin (Non-GAAP)	$	28,715		$	29,518		$	(6,948	)

OFFSHORE SOLUTIONS
Segment operating income	$	16,437		$	20,293		$	3,505
Add back:
Depreciation and amortization		10,820			10,023			1,980
Selling, general and administrative expense		1,044			1,297			1,064
Acquisition transaction costs		573			2,911			—
Asset impairment charges		2,128			—			—
Restructuring charges		—			237			—
Direct margin (Non-GAAP)	$	31,002		$	34,761		$	6,549

NON-GAAP RECONCILIATION OF ADJUSTED EBITDA

Adjusted EBITDA and 'Select Items' are considered to be non-GAAP metrics. Adjusted EBITDA is defined as net income (loss) before taxes, depreciation and amortization, gains and losses on asset sales, other income and expense - which includes interest income and interest expense, and excludes the impact of 'select items' which management defines as certain items that do not reflect the ongoing performance of our core business operations. These metrics are included as supplemental disclosures as management uses them to assess and understand current operational performance, especially in analyzing historical trends which are used in forecasting future period results. For this reason, we believe this measure will be useful to information to investors. The presence of non-GAAP metrics is not intended to suggest that such measures should be considered as a substitute for certain GAAP metrics and, given that not all companies define Adjusted EBITDA the same way, this financial measure may not be comparable to similarly titled metrics disclosed by other companies.

The following table reconciles adjusted EBITDA to net income (loss), which we believe is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to direct margin.

	Three Months Ended
	December 31,			September 30,			December 31,
(in thousands)		2025			2025			2024
Net income (loss) attributable to Helmerich and Payne, Inc.	$	(96,706	)	$	(57,363	)	$	54,772
Add back:
Net income attributable to non-controlling interest		1,775			1,556			—
Income tax expense (benefit)		11,201			(6,265	)		21,647
Other (income) expense
Interest and dividend income		(2,758	)		(3,353	)		(21,741	)
Interest expense		25,607			27,972			22,298
(Gain) loss on investment securities		(929	)		36,461			13,367
Foreign currency exchange (gain) loss		(27	)		(6,455	)		905
Other		1,926			5,985			(360	)
Depreciation and amortization		181,919			188,857			99,080
Acquisition transaction costs		3,405			5,677			10,535
Asset impairment charges		103,086			18,928			—
Restructuring charges		1,591			7,450			—
Other (gain) loss on sale of assets		1,926			(595	)		1,673
Excluding Select Items (Non-GAAP)
Credit loss expense associated with long-term note receivable		—			9,878			—
Change in actuarial assumptions on estimated liabilities		(1,607	)		(3,864	)		—
Gains related to an insurance claim		—			—			(2,366	)
Adjusted EBITDA (Non-GAAP)	$	230,409		$	224,869		$	199,810

View source version on businesswire.com: https://www.businesswire.com/news/home/20260204290127/en/

Kris Nicol

Vice President of Investor Relations

investor.relations@hpinc.com

Helmerich & Payne, Inc. Announces Fiscal First Quarter Results