Halliburton Q2 2026 revenue rose 3.7% to $5.71B and GAAP EPS rose to $0.64, but excluding a $95M one-time credit adjusted EPS was flat at $0.55 as Middle East conflict and weaker US fracking pricing offset growth in Latin America and Africa.
Revenue
$5.7B
+3.7% YoY
Net income
$534M
+13.1% YoY
Diluted EPS
$0.64
+16.4% YoY
Operating margin
13.6%
Headline: Middle East disruption and weaker US fracking pricing cancel out strong Latin America and Africa growth
Halliburton's revenue for the quarter ended June 30, 2026 was $5,714 million, up 3.7% year over year (and up 5.8% from Q1's $5,402 million). Reported net income rose 13.1% to $534 million, or $0.64 per diluted share versus $0.55. Most of that EPS gain comes from a one-time item, not from better operations. Operating income includes a $95 million pre-tax credit booked as "Impairments and other credits", made up of gains on equity investments ($64 million) and a government refund recovery ($48 million in "other"), minus a $17 million loss on selling part of the chemicals business. Take that credit out and adjusted EPS was $0.55, the same as a year earlier. Adjusted operating income fell 6% to $683 million, from $727 million.
Two things pulled in opposite directions. International revenue grew about 6%, driven by Latin America (+15%) and Europe/Africa/CIS (+24%). But Middle East/Asia, still the largest international region, fell 11% because of what the 10-Q calls "conflict-related disruptions" in Saudi Arabia, Iraq, Qatar and Kuwait. In North America, revenue was flat, and pricing for stimulation (hydraulic fracturing) services fell in US Land and Latin America. That is the main reason the Completion and Production segment's profit dropped.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$5,714M
$5,510M
+3.7%
Operating income (GAAP)
$778M
$727M
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Operating margin is the share of revenue left after running the business, before interest and tax (operating income ÷ revenue). Segment margins are segment operating income ÷ segment revenue. International revenue is total revenue minus North America. "Adjusted" figures are the company's own non-GAAP measures, which strip out the $95 million "Impairments and other credits" line.
Takeaway: The 16% jump in reported EPS is mostly accounting, not business. Without the $95 million of one-time gains, EPS was flat at $0.55. Adjusted operating profit was actually 6% lower, and a roughly 2% drop in share count from buybacks kept per-share earnings from falling. The underlying story: fast growth in Latin America and Africa is being cancelled out by Middle East disruption and weaker fracking prices in the US.
Halliburton reports two segments. Completion and Production (C&P) covers the work of getting a drilled well ready to produce and keeping it producing: fracturing ("stimulation"), cementing, artificial lift pumps, completion tools and specialty chemicals. Drilling and Evaluation (D&E) covers drilling services, drilling fluids, wireline logging (measuring rock properties down the hole) and Landmark software.
C&P: revenue was flat at $3,202 million (+1%), but operating income fell 8% to $474 million and the margin dropped from 16.2% to 14.8%. According to the 10-Q, gains in Latin American stimulation and artificial lift, and higher completion-tool sales in Europe/Africa, were offset by lower Middle East activity, weaker North American stimulation, and the loss of specialty-chemicals revenue after Halliburton sold part of that business in April 2026. Profit was "further adversely impacted by activity mix and reduced pricing for stimulation services in US Land and Latin America." In other words, Halliburton did roughly the same amount of fracking work but got paid less per job.
D&E: revenue rose 7% to $2,512 million and operating income rose 8% to $338 million, helped by more drilling-related services in North America, Europe/Africa and Asia. Lower drilling and wireline work in the Middle East partly offset those gains. Compared with Q1, D&E profit fell $13 million even though revenue rose. The company attributes that to the seasonal drop-off in software sales, which carry high margins and are usually concentrated in Q1.
Regions: a large shift out of the Middle East
Region
Q2 2026
Q2 2025
YoY Change
North America
$2,276M
$2,259M
+1%
Latin America
$1,123M
$977M
+15%
Europe/Africa/CIS
$1,017M
$820M
+24%
Middle East/Asia
$1,298M
$1,454M
-11%
Europe/Africa/CIS (+24%) was the fastest-growing region, driven by Angola, Nigeria, the North Sea, the Mediterranean, Ivory Coast and Namibia.
Latin America (+15%) grew on project management and well construction in Ecuador, fracking in Argentina and Mexico, and more work in the Caribbean and Brazil. Mexico remains a credit risk to watch: receivables (money owed to Halliburton) from its main Mexican customer were about 7% of total receivables, and the 10-Q again notes "payment delays" but says it does not expect material write-offs.
Middle East/Asia (-11%) is still the largest international region at $1,298 million, but it lost $156 million of revenue from a year earlier, about the same as Latin America's $146 million gain.
North America (+1%): US Land well construction and fracking grew, while fracking in the Gulf of America and Canada, well intervention, and the sold chemicals business declined. Compared with Q1, North America revenue rose 7%, which the CEO called a "recovery."
Market backdrop: oil prices rose sharply, rig counts did not
According to the 10-Q, WTI crude averaged $95.75 a barrel in Q2 2026, compared with $64.63 a year earlier. Brent averaged $103.28, compared with $68.01. Higher oil prices usually lead customers to spend more, but there is a lag, and drilling activity has not yet picked up. Average rig counts (the number of drilling rigs working, per Baker Hughes data cited in the filing) were:
Average rig count
Q2 2026
Q2 2025
US Land
540
558
North America total
703
699
International
1,056
1,078
Worldwide
1,759
1,777
Oil prices were about 48% higher than a year earlier, yet the US Land rig count was 3% lower and the international count 2% lower. Customers, in the 10-Q's words, "remained focused on capital discipline." For a service company, that means pricing pressure continues in the US even with expensive oil.
Cash, buybacks and the balance sheet
Q2 operating cash flow was $824 million. Free cash flow (operating cash flow minus capital spending, plus proceeds from asset sales) was $668 million. For the first half, free cash flow was $791 million versus $706 million a year earlier. That was helped by lower capital spending ($427 million vs. $656 million), even though operating cash flow fell to $1,097 million from $1,273 million because working capital consumed $187 million.
Halliburton bought back about $200 million of stock in Q2 (5 million shares), paid its $0.17 quarterly dividend (about $143 million), and had about $1.7 billion left under its buyback authorization.
The company had $2.0 billion of cash and $7.1 billion of long-term debt. The only near-term maturity is about $90 million due in February 2027.
The effective tax rate was about 19.0% (a $126 million provision on $664 million of pre-tax income), compared with 21.4% a year earlier.
Outlook
The company's forward-looking statements (10-Q and July 21 earnings release):
Capital spending of about $1.1 billion for 2026. Returns to shareholders are expected to be in line with the framework of returning at least 50% of annual free cash flow through dividends and buybacks.
SAP S4 system migration costs about $45 million expected in Q3 2026, with completion in Q4 2026. These costs are reported as a separate line and have been a steady drag: $88 million in the first half.
Middle East: activity "is recovering from conflict-related lows," but "the pace of recovery remains dependent on day-to-day developments in the region."
Outside the Middle East, the company expects growth "led by production services, drilling, unconventionals, and lift." The CEO expects "incremental improvements through the year" in North America. The company did not give numerical revenue or margin guidance.
Contract wins listed in the release include lump-sum turnkey work with Aramco covering about 285 planned onshore wells in Saudi Arabia, an Aramco unconventional-gas stimulation contract, integrated well construction for TotalEnergies' GranMorgu project offshore Suriname, and a field-management contract with Basra Oil Company in Iraq.
Our read: The results depend on two variables: how fast the Middle East comes back, and whether fracking prices in US Land hold. The Saudi contract awards suggest the Middle East revenue lost this quarter was deferred rather than lost to competitors, which would make Q3/Q4 comparisons easier. The C&P margin decline has a different cause, though. It comes from pricing, not volume, and $96 oil has not yet brought more US rigs back to work. So there is no clear sign that US pricing is recovering. If the Middle East rebounds while US fracking prices stay weak, adjusted margins would likely recover toward the prior-year 13% level but probably not beyond it. A useful check on Q3: whether adjusted EPS can move above the $0.55 it posted in both Q1 and Q2 2026.
Source: Halliburton Form 10-Q for the quarter ended June 30, 2026 (filed July 24, 2026), with non-GAAP reconciliations and cash-flow detail from the Q2 2026 earnings release (Form 8-K Exhibit 99.1, July 21, 2026).