Second Quarter 2026
Filed Jul 29, 2026Patterson-UTI reported $1.2 billion of second-quarter revenue, up 10% sequentially, alongside a $20 million net loss attributable to common stockholders and $232 million of adjusted EBITDA.
Revenue increased 10% sequentially and all operating segments reported strengthened activity or pricing, while third-quarter adjusted gross profit guidance calls for further improvement. The reported net loss reflected non-cash charges associated with exiting Colombia Contract Drilling operations and other noncontrolling investments.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total RevenueGAAP | $1.2 billion | a 10% sequential increase | – |
| Net Loss Attributable to Common StockholdersGAAP | $20 million | – | – |
| Adjusted Net Income Attributable to Common Stockholdersnon-GAAP | $1 million | – | – |
| Adjusted EBITDAnon-GAAP | $232 million | – | – |
| U.S. Contract Drilling operating daysother | 8,361 | – | – |
| Average U.S. rigs operatingother | 92 rigs | – | – |
| U.S. rigs operating at quarter endother | 96 rigs | – | – |
| Recently awarded term-contract pricing increasesother | approximately 10-15% | – | – |
| Revenue per pump hour sequential increaseother | a mid-single digit percentage | – | – |
| Non-cash charge associated with exit of Contract Drilling operations in Colombiaother | $21 million | – | – |
| Non-cash write down of other noncontrolling investmentsother | $5 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Drilling ServicesActivity strengthened as the quarter progressed. Higher demand and growing customer interest in structural rig upgrades supported pricing increases, while Directional Drilling benefited in part from continued growth in downhole motor rental. | $374 million | – | – |
| Completion ServicesHigh pressure pumping utilization, improved pricing, and continued growth in the integrated service offering drove stronger results. Industry capacity remained tight. | $754 million | – | – |
| Drilling ProductsInternational revenue reached a company record and U.S. revenue per industry rig approached record levels, offsetting challenges in the Middle East and seasonal spring breakup in Canada. | $91 million | – | – |
| OtherNo operating driver was provided. | $9 million | – | – |
third quarter of 2026 outlook
- Operating expensesgeneral and administrative expense of approximately $70 million
- NoteAverage U.S. rig count of approximately 100, with the quarter exited higher than the quarterly average.
- NoteDrilling Services adjusted gross profit of approximately $145 million.
- NoteCompletion Services adjusted gross profit of approximately $140 million.
- NoteDrilling Products adjusted gross profit of approximately $40 million.
- NoteOther adjusted gross profit of approximately $5 million.
- NoteDepreciation, depletion, amortization, and impairment expense of approximately $225 million.
- NoteTotal capital expenditures, net of asset sales, of approximately $600 million in 2026.
- NoteActive horsepower is not expected to increase during the second half of 2026.
Capital returns
- Declared a quarterly dividend of $0.10 per share, payable on September 15, 2026 to holders of record as of September 1, 2026.
- The company expects full-year 2026 free cash flow to more than cover its 2026 dividend payments.
What drove it
- Higher commodity prices contributed to increased U.S. onshore drilling activity during the second quarter.
- Drilling Services benefited from higher demand, structural rig upgrades, and a full quarter of higher pricing expected in the third quarter.
- Completion Services benefited from high pressure pumping utilization, improved core pressure pumping pricing, and integrated completion services.
- Completion Services fleet was effectively sold out before industry activity increased, and customer discussions around price increases remained constructive.
- Drilling Products benefited from record international revenue and U.S. revenue per industry rig approaching record levels.
- Power Solutions natural gas fueling recorded the strongest percentage increase in adjusted gross profit across Completion Services service lines.
Concerns
- The company exited Contract Drilling operations in Colombia, where it operated less than one rig on average during the period.
- Direct Operating Costs included a non-cash charge of approximately $20 million, primarily related to write-downs of inventory and other assets in Colombia.
- Commodity volatility continued into the third quarter amid ongoing geopolitical uncertainty.
- Drilling Products faced challenges in the Middle East and seasonal spring breakup in Canada.
- Completion demand typically follows drilling activity with a three- to six-month lag.
- The faster pace of activity required a larger first-half working capital investment.
What to watch
- Whether the average U.S. rig count reaches approximately 100 in the third quarter and exits above that quarterly average.
- Realization of additional Drilling Services pricing improvements and the expected approximately $145 million of third-quarter adjusted gross profit.
- Near-full utilization and further pricing improvement in Completion Services, supporting expected adjusted gross profit of approximately $140 million.
- Demand for Emerald natural gas direct drive technology and disciplined management of active horsepower during the second half of 2026.
- Seasonal recovery in Canada and higher U.S. drilling activity supporting expected Drilling Products adjusted gross profit of approximately $40 million.
- Execution of approximately $600 million of total capital expenditures, net of asset sales, in 2026 and the expected improvement in free cash flow in 2027.
Balance sheet and cash flow
- Working capital in the first half is typically a use of cash, and the stronger pace of activity required a larger working capital investment in the first half of the year.
- Working capital typically reverses somewhat in the second half.
- Free cash flow is expected to improve in 2027.
- Total capital expenditures, net of asset sales, are still expected to be approximately $600 million in 2026.
Analysis
Patterson-UTI reported second-quarter total revenue of $1.2 billion, a 10% sequential increase, indicating that activity improved through the quarter. The company reported a GAAP net loss attributable to common stockholders of $20 million, while adjusted net income attributable to common stockholders was $1 million and adjusted EBITDA was $232 million. The net-loss result included non-cash charges tied to the exit of Colombia Contract Drilling operations and the write down of other noncontrolling investments.
Drilling Services generated $374 million of revenue and $114 million of adjusted gross profit. U.S. Contract Drilling operating days totaled 8,361, with an average of 92 rigs operating and 96 rigs operating at the end of the quarter. Higher demand and customer interest in structural rig upgrades supported approximately 10-15% pricing increases on recently awarded term contracts compared with levels at the start of the year. The Colombia exit affected Direct Operating Costs through a non-cash charge of approximately $20 million; excluding those items, Drilling Services adjusted gross profit would have been $134 million.
Completion Services was the largest reported business, with $754 million of revenue and $123 million of adjusted gross profit. The company cited high pressure pumping utilization, improved pricing, and growth in integrated completion services. Revenue per pump hour increased by a mid-single digit percentage sequentially on average, while industry capacity remained tight. Drilling Products reported $91 million of revenue and $37 million of adjusted gross profit, supported by record international revenue and U.S. revenue per industry rig approaching record levels, despite challenges in the Middle East and spring breakup in Canada.
The third-quarter outlook calls for further operating improvement: approximately $145 million of adjusted gross profit in Drilling Services, approximately $140 million in Completion Services, approximately $40 million in Drilling Products, and approximately $5 million in Other. Management expects approximately 100 average U.S. rigs during the third quarter and expects to exit the quarter above that average. The company also expects general and administrative expense of approximately $70 million and depreciation, depletion, amortization, and impairment expense of approximately $225 million.
Capital allocation remains directed toward high-return, 100% natural gas Emerald investments and disciplined fleet management. Total capital expenditures, net of asset sales, are still expected to be approximately $600 million in 2026, and active horsepower is not expected to increase in the second half of 2026. Management said stronger activity increased first-half working capital needs, but expects full-year 2026 free cash flow to more than cover 2026 dividend payments and expects free cash flow to improve in 2027. The company declared a quarterly dividend of $0.10 per share.
Management, verbatim
We delivered a strong quarter, with a positive inflection in activity and momentum building across each of our businesses as we moved through the second quarter and into the third.
Andy Hendricks, Chief Executive Officer
Commodity volatility has continued into the third quarter amid ongoing geopolitical uncertainty, but the broader market backdrop has become increasingly constructive.
Andy Hendricks, Chief Executive Officer
Activity is ramping faster than we initially expected, and we are moving decisively to capture opportunities that should create meaningful long-term value for Patterson-UTI.
Andy Smith, Chief Financial Officer
Not in the filing
stated, not guessed- GAAP gross profit and gross margin.
- GAAP operating income or loss.
- GAAP earnings or loss per diluted share.
- Non-GAAP earnings per diluted share.
- Prior-year revenue, net income, adjusted net income, adjusted EBITDA, and segment comparisons.
- Prior-quarter revenue, net income, adjusted net income, adjusted EBITDA, and segment comparisons other than the reported total-revenue sequential increase and revenue-per-pump-hour sequential increase.
- Cash balance, debt balance, liquidity, operating cash flow, and reported free cash flow.
- Share repurchases or repurchase authorization.
- Third-quarter total revenue guidance.
- Third-quarter tax-rate guidance.
- Prior outlook for comparison.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.