Oil States International, Inc. (NYSE: OIS) 2025 Annual Report – Key Highlights and Investor Insights

Executive Summary

Oil States International, Inc. (“OIS” or “the Company”) has released its 2025 Annual Report, offering investors a comprehensive look at the company’s operational performance, strategic initiatives, and the challenges faced during a turbulent period for the oil & gas equipment and services industry. Several critical developments, some of which are likely to have a material impact on the Company’s share price, have been disclosed.

Key Developments and Strategic Actions

• Significant Restructuring and Asset Impairments:
  • During 2025, OIS undertook substantial restructuring actions, primarily focused on its U.S. land-based operations. This included the consolidation, relocation, and exit of several operating locations, discontinuation of certain underperforming product and service lines, and workforce reductions.
  • As a result, the company recorded \$121.1 million in non-cash asset impairment charges and \$11.6 million in costs associated with facility exits and other charges. These actions reflect management’s expectation of continued challenging market conditions and a focus on optimizing the cost structure.
• Portfolio Rationalization and Exit from Underperforming U.S. Segments:
  • OIS exited certain locations and product offerings in the U.S. market, citing competitive conditions and poor returns. This strategic pivot is aimed at improving long-term margins and cash flows.
• Financial Deleveraging and Capital Structure Changes:
  • OIS generated \$105.1 million in cash flow from operations in 2025.
  • The company executed a repurchase of \$70.8 million in principal amount of its 4.75% convertible senior notes due April 1, 2026, materially reducing leverage.
  • OIS also repurchased 3.3 million shares of common stock for \$16.6 million, signaling management’s confidence in the business and a commitment to shareholder returns.
  • On January 28, 2026, OIS replaced its asset-based lending (ABL) agreement with a new cash flow-based credit agreement, providing up to \$75 million in a revolving credit facility and \$50 million in a term loan facility. This move enhances liquidity and financial flexibility heading into 2026.
• Market and Segment Performance:
  • Increased capital investments by offshore and international customers were offset by a marked decline in U.S. land-based investments. The U.S. market was particularly impacted by lower activity, competitive pricing, and inflationary pressures on product costs.
  • OIS’s strategy is now focused on offshore and international expansion, new technology offerings, research & development, and organic capital expenditures to enhance cash flows and shareholder returns.

Risks and Uncertainties Highlighted

• Market Volatility and Oil & Gas Industry Cyclicality:
  • The company warns that its financial results are highly sensitive to oil and natural gas prices, capital spending by E&P companies, and the general level of drilling and completion activity. Ongoing uncertainties about crude oil demand, capital discipline among operators, and inflation in labor and materials present further downside risks.
• Geopolitical Risks:
  • Ongoing military conflicts in Europe and the Middle East, as well as the risk of military action in South America, could disrupt energy markets, supply chains, and customer projects, potentially impacting OIS’s revenues and margins.
• Climate Change and Regulatory Pressure:
  • OIS continues to face risks from evolving climate-related regulations, enhanced disclosure requirements, and the possibility of increased operating costs, reputational damage, litigation, and capital constraints as investors and lenders shift away from carbon-intensive industries.
• Financial Risks:
  • Inflation and potential increases in tariffs may affect input costs and borrowing rates. The company also highlights risks relating to access to capital and credit markets, especially if market conditions deteriorate.
• Execution Risks:
  • The company acknowledges the risk that it may not successfully develop new competitive technologies, integrate acquisitions, or retain key personnel, any of which could materially impact future performance.

Shareholder and Market-Sensitive Information

• Outstanding Shares and Market Value:
  • As of February 20, 2026, OIS had 60,206,305 shares of common stock outstanding.
  • The aggregate market value of voting and non-voting common stock held by non-affiliates as of June 30, 2025, was \$303.76 million.
• SEC Filing Status and Governance:
  • OIS is an accelerated filer and is not an emerging growth company.
  • The company is in compliance with the Sarbanes-Oxley Act and has received auditor attestation for its internal controls.
• Forward-Looking Statements:
  • OIS cautions investors that actual results may vary materially from forward-looking statements due to numerous factors, including those outlined above.

Investor Takeaways

• The 2025 Annual Report reveals a period of significant transformation for OIS, with management proactively addressing adverse market conditions through restructuring, portfolio optimization, and deleveraging.
• While these actions may position the company for improved long-term performance, the near-term impact of asset impairments, facility closures, and market volatility is likely to weigh on financial results.
• The company’s clear focus on offshore and international growth, enhanced liquidity, and share repurchases may support share value, but investors should remain alert to ongoing risks from the macro environment, regulatory changes, and competitive pressures.
• Given the magnitude of restructuring charges, changes in capital structure, and the pivot in business strategy, these disclosures are material and could drive share price movement as the market digests the implications.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with professional advisors before making any investment decisions. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations.

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