01—Abstract
Summary
Summary of the 10-Q filed July 25, 2025. Cited figures are marked; the original filing is the authoritative source.
Halliburton Company (HAL) reported second-quarter 2025 revenue of $5.51 billiona, down from $5.83 billion in the prior-year quarter, and operating income of $727 million versus $1.03 billion.
Net income attributable to the company was $472 millionb, or $0.55 per share, compared with $709 million, or $0.80 per share, a year earlier. The Completion and Production segment's revenue fell 7% to $3.17 billion and its operating income fell 29% to $513 million, while Drilling and Evaluation revenue fell 4% to $2.34 billion and its operating income fell 23% to $312 million. The filing attributes the declines to lower pressure pumping services in the Western Hemisphere, reduced completion tool sales, decreased drilling activity in Mexico and Saudi Arabia, and reduced pricing for stimulation services in US Land.
For the first six months of 2025, the company recorded $356 millionc of pre-tax impairments and other charges, including $107 million of severance costs, as it adjusted its cost structure to market conditions. Management states that it expects full-year 2025 international revenue and North America revenue to decline year over year, and that WTI crude prices fell approximately 11% in the second quarter compared with the first quarter. Cash and equivalents were $2.04 billion at June 30, 2025, down from $2.62 billion at year-end 2024, after $1.27 billion of operating cash flow was offset by $656 million of capital expenditures, $507 million of share repurchases, and $292 million of dividends.
The filing also discusses a proposed IRS adjustment tied to the 2016 termination fee paid to Baker Hughes. The company states that, if the IRS position prevails, the adjustment could result in cash taxes of approximately $640 milliond plus interest, and that the matter is being contested through the IRS appeals process. Management also says that the $3.5 billion revolving credit facility and absence of financial covenants support its liquidity.
02—Key points
Key Highlights
- Total revenue of $5.51 billion in Q2 2025, down 6% from $5.83 billion in Q2 2024; operating income of $727 million versus $1.03 billion.
- Net income attributable to the company of $472 million ($0.55 per diluted share) in Q2 2025, compared with $709 million ($0.80 per share) in Q2 2024.
- Completion and Production operating income fell 29% to $513 million, and Drilling and Evaluation operating income fell 23% to $312 million.
- Six-month impairments and other charges of $356 million, including $107 million of severance costs and a $104 million impairment of assets held for sale tied to a strategic decision to market a portion of the chemical business.
- Management expects full-year 2025 international and North America revenue to decline year over year, citing activity reductions in Saudi Arabia and Mexico and pricing pressure.
- Cash and equivalents of $2.04 billion at June 30, 2025; $3.5 billion of available committed bank credit under a revolving facility expiring April 27, 2027.
- Repurchased 12 million shares for $252 million in Q2 2025; approximately $2.5 billion remains authorized under the repurchase program.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed July 25, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $5.51B$5.83B | −5.5% |
| Operating Expenses | $4.78B$4.80B | −0.4% |
| Operating Income | $727.00M$1.03B | −29.6% |
| Net Income | $480.00M$713.00M | −32.7% |
| EPS (Basic) | $0.55$0.80 | −31.2% |
| EPS (Diluted) | $0.55$0.80 | −31.2% |
| Shares Outstanding (Basic) | 857.00M884.00M | −3.1% |
| Shares Outstanding (Diluted) | 857.00M886.00M | −3.3% |
05—Questions
Frequently Asked Questions
Why did Halliburton's operating income decline in the second quarter of 2025?
The filing attributes the decline mainly to lower pressure pumping services in the Western Hemisphere, reduced completion tool sales in the Gulf of America and Africa, and reduced pricing for stimulation services in US Land. Drilling and Evaluation was also affected by decreased drilling services in Mexico and Saudi Arabia and by startup and mobilization costs across multiple product service lines.
What is the status of the IRS dispute over the Baker Hughes termination fee?
The IRS issued a Notice of Proposed Adjustment on September 28, 2023, proposing to reclassify approximately 95% of the $3.5 billion termination fee paid to Baker Hughes in 2016 from an ordinary deduction to a capital loss. Halliburton disagrees and is contesting it through the IRS administrative appeals process. The company estimates cash taxes of about $640 million plus interest if the IRS position prevails, but states that no payment is currently required and that the company does not expect a final resolution within the next twelve months.
How much cash did Halliburton generate and how did it use it in the first half of 2025?
Cash flows from operating activities were $1.27 billion. Uses included $656 million of capital expenditures, $507 million of stock repurchases, $292 million of dividends, $345 million for the purchase of an equity investment, and $162 million to acquire businesses. Cash and equivalents decreased to $2.04 billion from $2.62 billion at December 31, 2024.
What does management expect for the remainder of 2025?
Management expects full-year 2025 international revenue to decrease year over year, driven by further activity reductions in Saudi Arabia and Mexico and pricing pressure, partially offset by growth in Brazil and Norway. It also expects North America revenue to decline year over year. The company expects capital spending of approximately 6% of revenue and returns to shareholders in line with its framework of returning at least 50% of annual free cash flow.
What is the status of the SAP S4 upgrade?
The company now expects to complete its SAP S4 migration in the second half of 2026. It recognized $62 million of expense in the first six months of 2025, and is re-evaluating the previously estimated $270 million total cost, with a new estimate to be provided in the third quarter of 2025.
06—Continue