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SEC filingChallenging quarter with revenue decline and operating loss, driven by lower activity and pricing across segments, though management sees potential for H2 recovery.
Total revenue decreased 12.7% year-over-year to $1.1 billion, primarily due to lower operating days in our contract drilling business within the United States and reduced service pricing and activity in completion services. Direct operating costs also decreased, partially offset by higher raw material costs and repair expenses.
We reported an operating loss of $14.3 million compared to operating income of $16.9 million in the prior year, resulting in an operating margin of -1.3%. The decline was driven by lower revenue and cost pressures, including higher raw material costs and repair expenses.
Net cash provided by operating activities was $63.9 million, down from $208.1 million a year ago, primarily due to lower earnings. Capital expenditures decreased to $116.6 million from $161.8 million, reflecting timing of order placement and lower maintenance capital due to fewer operating days. Free cash flow was negative $52.8 million as capital expenditures exceeded operating cash flow. Our primary sources of liquidity remain cash and cash equivalents, availability under our Credit Agreement, and cash provided by operating activities.
Total revenues and direct operating costs decreased primarily due to a decrease in operating days in our contract drilling business within the United States. Other completion services revenue and direct operating costs decreased due to lower service pricing and decline in activity for our power solutions operations and a decline in activity in our wireline and cementing operations.
While the full effects are yet to be determined, we believe these dynamics could support increased activity in the second half of 2026, particularly in North America, as operators reassess capital allocation and activity levels commensurate with commodity prices and supply chain dependability. The majority of our capital expenditures are expected to be used for normal, recurring items necessary to support our business.