Helmerich & Payne Reports $1.0 Billion Revenue, Net Income Declines in Q2 FY 2025

Helmerich & Payne, Inc. (H&P) reported significant financial developments in its latest 10-Q filing for the second quarter of fiscal year 2025, reflecting a transformative period marked by the acquisition of KCA Deutag International Limited. For the three months ended March 31, 2025, H&P recorded operating revenues of $1.0 billion, a substantial increase from $687.9 million in the same period last year. This growth was primarily driven by the acquisition, which contributed an additional $320.6 million in revenue. However, net income attributable to H&P fell to $1.7 million, or $0.01 per diluted share, compared to $84.8 million, or $0.84 per diluted share, in the prior year, largely due to increased operating expenses and acquisition-related costs.

The company's direct operating expenses surged to $705.1 million for the quarter, up from $402.3 million a year earlier, reflecting the costs associated with the KCA Deutag acquisition and increased operational activity. Depreciation and amortization expenses also rose significantly to $157.7 million, compared to $104.5 million in the previous year, driven by the expanded asset base following the acquisition. Additionally, H&P incurred $29.9 million in acquisition transaction costs during the quarter, a stark contrast to just $0.9 million in the same quarter of the previous year.

Operationally, H&P's rig fleet included a total of 384 drilling rigs as of March 31, 2025, with 229 active contracted rigs, an increase from 170 at the end of the previous fiscal year. The company reported a total contract drilling backlog of $7.6 billion, a significant rise from $1.5 billion as of September 30, 2024, primarily due to the acquisition. The backlog includes approximately $4.2 billion attributed to KCA Deutag, indicating a strong pipeline of future revenue.

Looking ahead, H&P anticipates realizing over $25 million in synergies from the KCA Deutag acquisition, with overall cost-saving initiatives expected to reduce the company's cost structure by approximately $50 to $70 million. However, the company also noted potential challenges due to recent volatility in oil and natural gas prices, which could impact capital expenditures and operational activity levels in the near term. The management remains focused on leveraging its expanded capabilities and market position to navigate these challenges effectively.