Patterson-UTI Energy — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the quarter ended September 30, 2026, was $1.342 billion, representing a 9% sequential increase from $1.228 billion in the second quarter of 2026 and a 14% increase from $1.176 billion in the third quarter of 2025.
• Net income attributable to common stockholders was $28.4 million for the quarter, compared to a net loss of $19.6 million in the second quarter of 2026 and a net loss of $36.4 million in the third quarter of 2025.
• Adjusted EBITDA was $264 million for the quarter, up from $232 million in the second quarter of 2026 and $219 million in the third quarter of 2025.
• Adjusted gross profit totaled $333 million for the quarter, comprising $149 million from Drilling Services, $133 million from Completion Services, $51 million from Drilling Products, and $4 million from Other.
• Cash, cash equivalents, and restricted cash were $339.3 million as of September 30, 2026, down from $420.6 million as of December 31, 2025.
• Long-term debt, net, was $1.234 billion as of September 30, 2026, compared to $1.221 billion as of December 31, 2025.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $420.9 million, compared to $563.7 million in the same period of 2025.
• Net cash used in investing activities for the nine months ended September 30, 2026, was $356.6 million, compared to $436.8 million in 2025.
• Net cash used in financing activities for the nine months ended September 30, 2026, was $141.6 million, compared to $178.6 million in 2025.

Guidance and Future Outlook:

• Drilling Services expects to operate an average of approximately 104 rigs in the U.S. during the fourth quarter and exit 2026 above that level, with additional rig reactivations anticipated in the first quarter of 2027.
• Drilling Services adjusted gross profit is expected to be $150 million in the fourth quarter, benefiting from continued pricing momentum and higher dayrates, though reactivation costs will be incurred late in the quarter and early 2027.
• Completion Services expects fourth quarter adjusted gross profit of $140 million, supported by activity levels consistent with the third quarter and additional pricing improvements, with less pronounced seasonal impact than prior fourth quarters.
• Drilling Products expects fourth quarter adjusted gross profit to decline 5-10% sequentially, primarily due to lower drilling activity in Saudi Arabia caused by ongoing geopolitical unrest.
• Other adjusted gross profit is expected to be steady in the fourth quarter compared to the third quarter.
• General and administrative expense is expected to be approximately $70 million in the fourth quarter, and depreciation, depletion, amortization, and impairment expense is expected to be approximately $220 million.
• Management expects free cash flow to remain strong in the fourth quarter and increase meaningfully in 2027 compared with 2026.
• Customer discussions indicate a likelihood for additional rig reactivations and increased completion demand in 2027.

Business Segments and Product Lines:

• Drilling Services: Revenue was $417 million with adjusted gross profit of $149 million. U.S. contract drilling operating days totaled 9,249 with an average of 101 rigs operating, exiting the quarter with 104 rigs. Growth was concentrated in the Rockies and Permian basins. Directional Drilling results outpaced overall industry drilling activity with stronger margins.
• Completion Services: Revenue was $808 million with adjusted gross profit of $133 million. Results improved sequentially supported by a mid-single-digit pricing increase. Total completion activity declined modestly due to temporary sand availability constraints in South Texas and trucking delays in the Permian Basin. Approximately 90% of the active fleet will be natural gas capable by the end of 2026.
• Drilling Products: Revenue was $110 million with adjusted gross profit of $51 million, representing the strongest quarterly revenue and adjusted gross profit since the 2023 Ulterra acquisition. Revenue increased 21% sequentially, with international revenue reaching a company record for the second consecutive quarter.
• Other: Revenue was $6 million with adjusted gross profit of $4 million.

Market and Competitive Landscape:

• Increased U.S. onshore drilling and completion demand is supporting stronger pricing and returns.
• Customer programs increasingly require upgraded rigs with advanced digital and automation capabilities and larger structures for deeper wells and longer laterals, supporting premium pricing for highest-specification rigs.
• Pricing momentum in Completion Services remains positive, particularly for natural gas-powered assets which offer a fuel-cost advantage over diesel.
• Natural gas-powered frac equipment remains in very short supply, necessitating further pricing improvements to support investment required to meet industry demand.
• Drilling Products benefited from strong U.S. demand driving a company record revenue per industry rig.

Risks and Challenges:

• Completion Services faced elevated non-productive time late in the quarter due to temporary sand availability constraints in South Texas and trucking delays in the Permian Basin.
• Drilling Products faces risks from geopolitical unrest in Saudi Arabia, a key international market, leading to expected lower activity.
• Management anticipates incurring reactivation costs in the fourth quarter and early 2027 as additional rigs are prepared for reactivation.
• The company anticipates additional costs as it winds down operations in Colombia.
• Forward-looking statements are subject to risks and uncertainties including future commodity prices, activity levels, contract terms, and geopolitical events.

Management Commentary and Tone:

• CEO Andy Hendricks stated the company is benefiting from increased U.S. onshore drilling and completion demand, with investments in fleet and digital capabilities delivering differentiated operational performance.
• CFO Andy Smith expressed confidence in the outlook, citing strong free cash flow generation during the quarter.
• Management indicated that market conditions should allow the company to create additional value for shareholders.
• The tone is confident regarding future financial performance improvements and market position gains as industry demand strengthens.

Other Key Points:

• A quarterly dividend of $0.10 per share was declared, payable on December 15, 2026, to holders of record as of December 1, 2026.
• The company returned approximately $62 million to shareholders during the third quarter, including $24 million for share repurchases.
• Total capital expenditures for the quarter were $141.4 million.
• For the nine months ended September 30, 2026, the company returned $114.1 million in dividends and $33.7 million for share repurchases.
• The company continues to evaluate capital-allocation opportunities including high-return strategic investments, additional cash returns to shareholders, and debt reduction.
• The conference call to discuss results is scheduled for October 29, 2026, at 9:00 a.m. Central Time.