OIS Filings — Oil States International, Inc - FilingSpy
OIS
Oil States International, Inc
A maker of engineered equipment and services for offshore drilling, well completion, and downhole work, Oil States International supplies products like its FlexJoint® connectors and Tempress tools to energy, military, and industrial customers around the world. It began in 1942 as the Grand Prairie Rubber Company in Texas, started by "Slim" Bowerman with four employees making rubber parts for the oil patch. Its FlexJoint, introduced in 1976, was the critical seal used to cap the Macondo well after the 2010 Deepwater Horizon disaster.
Offshore backlog hits $451M with a 1.2x book-to-bill ratio, driving a $5.9M Q2 profit despite a 5% revenue decline.
The offshore order book strengthened even as slipped. Revenue fell 5% to $156.7 million, but widened 0.5 points to 24.7% and more than doubled to $11.7 million, helped by a facility sale gain and a 35% increase in Downhole Technologies revenue. The company retired its remaining convertible notes after the quarter, leaving it with a clean balance sheet and a record offshore .
Key takeaways
rose to $11.7 million from $5.3 million a year ago, driven by a $4.1 million gain on a facility sale, a $3.8 million reduction in and , and a 35% increase in Downhole Technologies to $39.7 million.
Offshore Manufactured Products reached a record $451 million with a quarterly of 1.2x, signaling that new orders are again outpacing conversion after the Q1 dip to 0.9x.
Downhole Technologies rose 35% to $39.7 million on higher demand for new perforating and completion products, a reversal from the 's prior-year losses and impairments.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 net income rose to $5.9M despite revenue decline, driven by lower D&A and Downhole Technologies growth.
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Consolidated Q2 fell 5% to $156.7M, primarily from exiting U.S. land services and lower Offshore Manufactured Products project-driven product sales.
Consolidated fell 5% to $156.7 million, as the exit from underperforming U.S. land service lines and lower Offshore Manufactured Products project-driven product sales more than offset the Downhole Technologies increase.
widened 0.5 points to 24.7%, as the mix continued to shift toward higher-margin offshore and downhole work.
After the quarter ended, the company retired the remaining $52.7 million of its 4.75% convertible notes due April 2026 using $50.5 million in cash and the issuance of common stock, recognizing a $3.6 million pre-tax loss on extinguishment.
What changed
Offshore Manufactured Products returned to 1.2x in Q2 2026 after dipping to 0.9x in Q1 2026, the first sub-1.0x reading in over a year, confirming that the Q1 pause was temporary and the deepwater order cycle remains intact.
Downhole Technologies swung from an operating loss in Q3 2025 to a 35% increase in Q2 2026, suggesting the supplier explosion and U.S. land headwinds flagged in prior quarters are easing as new products gain traction.
Completion and Production Services continued to decline , but the rate of decline is moderating as the exit from underperforming U.S. land locations nears completion; the 's was not separately disclosed this quarter.
The convertible note maturity flagged in every prior filing was resolved after the quarter ended: the company retired the remaining $52.7 million in notes using cash, borrowings, and stock issuance, eliminating the last material .
turned negative in H1 2026 at negative $15.5 million, a reversal from the $4.8 million generated in H1 2025, driven by a $34.6 million increase for and incentive payouts.
What to watch
Offshore Manufactured Products in Q3 2026: whether it can sustain above 1.0x after the 1.2x in Q2, testing if the record $451 million continues to grow or begins to convert without replenishment.
Downhole Technologies trajectory: whether the 35% increase in Q2 represents a sustainable recovery in U.S. land completions activity or a one-time boost from new product introductions.
generation in Q3 2026: whether the company can return to positive free cash flow after the $34.6 million build in H1, particularly as levels and incentive payouts normalize.
Impact of the post-quarter convertible note retirement: how the $50.5 million cash outlay and share issuance affect liquidity, diluted share count, and the company's ability to fund operations under its new Cash Flow Credit Agreement.
Downhole Technologies surged 35% to $39.7M on higher demand for new perforating and completion products.
improved to $11.7M from $5.3M, aided by a $3.8M reduction in and a $4.1M gain on a facility sale.
A $3.6M pre-tax loss was recognized on the extinguishment of the 2026 convertible notes, which were retired with $50.5M cash and share issuance.
Cash used in operations was $8.1M for H1 2026 versus $24.3M generated a year ago, driven by a $34.6M increase for and incentive payouts.
Offshore Manufactured Products rose to $451M with a Q2 of 1.2x, signaling future despite current project delays.
Quantitative and Qualitative Disclosures About Market Risk
Principal market risks are floating-rate interest exposure and foreign-currency translation/transaction risk, managed via natural offsets and limited hedging.
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As of June 30, 2026, the company had $18.6 million in floating-rate debt under its Cash Flow Credit Agreement, exposing it to higher if short-term rates rise.
A hypothetical 1% increase in floating rates would raise annual consolidated by approximately $0.2 million.
Foreign-currency risk arises because operations in multiple countries generate and incur expenses in currencies other than the U.S. dollar, particularly in the Offshore Manufactured Products .
The company partially mitigates currency risk by paying local expenses in local currencies and collecting a substantial portion of customer contracts in U.S. dollars.
Reported foreign-currency exchange gains were $0.3 million for the first six months of 2026, recorded in other .
increased by $0.5 million to $66.8 million, driven by currency translation, with the British pound weakening 2% and the Brazilian real strengthening 6% against the U.S. dollar.
“Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 includes a detailed discussion of our risk factors. The risks described in such report are not the only risks we face. Additional risks and uncertainties not currently known to…
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“Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 includes a detailed discussion of our risk factors. The risks described in such report are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may materially adversely affect our business, financial conditions or future results. There have been no material changes to our risk factors as set forth in our 2025 Annual Report on Form 10-K, as amended by our 2025 Annual Report on Form 10-K/A.