Halliburton (HAL): Cash-Strong Execution Amid Flat Revenue and Strategic Pivot

Free cash flow beats the headline: $2.42B in FY2024 while revenue holds near prior-year levels#

Halliburton [HAL] closed FY2024 with $2.42B of free cash flow, a meaningful increase from $2.08B in FY2023 (+16.35%). That improvement in cash conversion arrived even as reported revenue slipped slightly to $22.94B from $23.02B a year earlier (a change of -0.35% YoY). The juxtaposition is the single most consequential development for stakeholders: operating performance tightened only modestly, but cash generation and balance-sheet repair provided management optionality — from buybacks to continued capex and investment in recurring-service initiatives. According to Halliburton’s FY2024 filings (filed Feb 12, 2025), the company also repurchased $1.0B of common stock and paid $600MM in dividends while reducing net debt by $560MM to $5.98B at year-end, underlining a cash-first capital allocation stance.

Financial performance: shallow revenue decline, margin resilience and improved cash conversion#

Examining the P&L, Halliburton delivered a profile consistent with a mature oilfield-services operator that is squeezing more cash out of its installed base. Revenue of $22.94B was down marginally from $23.02B in 2023 (-0.35%). Gross profit for FY2024 stood at $4.30B, implying a gross margin of 18.75% (4.30/22.94). Operating income of $3.82B translates to an operating margin of 16.66%, while net income of $2.50B yields a net margin of 10.90%. FY2024 EBITDA was $4.76B, giving an EBITDA margin of 20.76%.

The quality of those earnings is evident when cash flow is compared to reported profit. Net cash provided by operating activities was $3.87B, which is 153.57% of reported net income ($2.52B as reported in cash flow statement), and free cash flow conversion (FCF/net income) was approximately 96.03% (2.42/2.52). That level of conversion suggests operating cash generation — not accounting maneuvers — is driving the company’s ability to return capital and reduce leverage. The company also increased cash on the balance sheet to $2.62B (up from $2.26B at year-end 2023, a +15.93% increase).

Table: Income statement highlights (FY2024 vs FY2023 vs FY2022)

These figures point to margin resilience: while top-line growth stalled, the company maintained healthy operating and EBITDA margins, reflecting either better mix, pricing in higher-value service lines, efficiency gains, or a combination thereof. Operating income dipped from $4.08B to $3.82B, a decline of -6.37%, but the firm still converted that operating performance into strong cash flow.

Balance sheet and leverage: steady repair, conservative current liquidity#

Halliburton’s year-end balance sheet shows a deliberate reduction in leverage alongside sufficient near-term liquidity. Total assets rose to $25.59B, current assets were $12.38B, and total stockholders’ equity stood at $10.51B. Total debt decreased to $8.60B from $8.81B a year earlier (-2.38%), while net debt fell from $6.54B to $5.98B, a reduction of -8.56%.

A simple current ratio calculation using reported current assets and current liabilities (12.38/6.05) yields 2.05x, confirming a comfortable short-term liquidity buffer. Using year-end figures, total debt to equity (8.60/10.51) is 0.82x, and net debt to FY2024 EBITDA (5.98/4.76) is 1.26x when using the single-year EBITDA number. Note that some published TTM metrics in the dataset report net debt/EBITDA as 1.63x; this difference arises from the use of a trailing twelve-month EBITDA that differs from the fiscal-year EBITDA figure reported in the income statement. When encountering such discrepancies, the FY-end single-year calculation above is the transparent arithmetic result; readers should understand the divergence typically reflects timing and TTM adjustments.

Table: Balance sheet & cash flow highlights (FY2024 vs FY2023)

Halliburton’s ability to run meaningful buybacks while still reducing net debt is a signal of improved cash generation and a management emphasis on returning cash to shareholders while maintaining investment flexibility.

Capital allocation and the trade-off between returns and reinvestment#

Capital deployment in FY2024 consisted of $1.44B in capital expenditures, $1.0B of share repurchases, and $600MM in dividends. Capital spending represented approximately 6.28% of revenue (1.44/22.94). Operating cash flow comfortably covered capex and distributions: operating cash flow of $3.87B less capex left room for buybacks and debt reduction.

On the investment side, reported research and development expense in FY2024 is listed as $0 in the dataset, which conflicts with the prior year’s disclosed R&D of $408MM. This looks like a classification change — Halliburton historically embeds technology and R&D spending across product groups, including digital services and engineering. Given reported investments in digital platforms and productization described elsewhere in management commentary, it is likely that R&D-like spend was either reclassified to operating expenses or capitalized. Where public filings show discontinuities like this, investors should seek management disclosure in 10-K/10-Q notes. For the purposes of this article, capital expenditure and explicit cash investments remain the clearest numeric signals of reinvestment.

Margin and mix story: where is resilience coming from?#

The company's relatively stable gross and EBITDA margins (gross margin 18.75%, EBITDA margin 20.76%) indicate that Halliburton’s mix and pricing in higher-value services — completions, production technologies and digital contracts — are supporting profitability despite flat overall activity. Operating income dipped by -6.37%, but the company maintained strong operating leverage into cash flow.

Two structural contributors appear material. First, Halliburton has been shifting toward longer-duration, integrated contracts that bundle hardware, consumables and software, producing more predictable revenue tails and the potential for higher margin through services and analytics. Second, offshore and high-complexity work (for example, North Sea and other mature-basin interventions) typically commands premium pricing and can prop margins when basic drilling activity is weaker. Those strategic shifts are consistent with management statements and commercial contracting trends described in the company’s strategic materials.

Strategic pivot into digital and energy-transition markets: scale, timing and ROI questions#

Halliburton is explicitly repositioning parts of its business toward recurring digital services, carbon capture and storage (CCS), geothermal and other subsurface-based low-carbon solutions. The firm’s strategic playbook—applying well-construction, cementing and reservoir-monitoring capabilities to CCS, bundling hardware with analytics, and packaging long-run monitoring and operations—matches the capabilities inherent in the legacy business.

The financial case for this pivot rests on two assumptions: that digital and CCS contracts deliver higher gross margins (or at least more predictable margin profiles), and that the increased lifetime value of customers justifies near-term investments in productization and local infrastructure. Halliburton’s FY2024 cash generation gives management the runway to make those investments without sacrificing balance-sheet health. However, execution risk is non-trivial. Large-scale CCS projects have long lead times, regulatory complexity, and require deep engineering assurances around well integrity and long-term monitoring. The payoff is durable recurring revenue only if Halliburton converts initial engineering wins into multi-year operational frameworks.

On capital intensity, the FY2024 capex of $1.44B is manageable relative to operating cash flow. If management focuses future incremental investment on productized digital platforms and replicable CCS well packages — rather than heavy, bespoke project capex — the expected return profile could be attractive. That said, the timeline for material revenue contribution from CCS and geothermal remains multi-year, and investors should expect early-stage margin dilution as the company scales standardized offerings and builds local capacity in target basins.

Offshore focus and North Sea exposure: playing to strengths#

Halliburton’s commercial emphasis on the North Sea and other high-value offshore basins is a logical extension of its differentiated capabilities. Mature basins require well-integrity work, interventions, and often bespoke completion solutions — services that Halliburton can cross-sell with its digital monitoring offerings. Winning life-of-field framework agreements in these markets can produce steadier revenue and better visibility into utilization and pricing. From a P&L perspective, higher utilization of premium offshore services would support margins even if near-field drilling volumes soften.

However, offshore work brings cost and operational risk. Local presence, warehousing and skilled crews are necessary and capital-intensive. The key to extracting margin in these geographies is repeatable frameworks and aftermarket services — areas where Halliburton’s push into bundled contracts and digital monitoring could be accretive.

Competitive dynamics and what differentiates Halliburton#

In the oilfield-services landscape, Halliburton competes with a small set of global players that include Schlumberger and Baker Hughes, among others. Differentiation rests on proprietary downhole technology, breadth of integrated services, scale, and increasingly, the depth of data and analytics capabilities. Halliburton’s strategy of packaging hardware, consumables and analytics into longer-duration agreements attempts to create stickier customer relationships and reduce the commoditization risk that plagues basic drilling services.

Two competitive questions matter. First, can Halliburton scale digital subscriptions and recurring-service economics to meaningfully change revenue mix? Second, will CCS/geothermal projects produce margin-rich, recurring service tails, or will they be bespoke and margin-dilutive during the build phase? The FY2024 numbers show the company with the cash base to pursue these answers, but market share shifts will hinge on speed of productization and the ability to secure multi-year operational agreements with majors and national oil companies.

Forecast signals and analyst estimates (what the numbers imply)#

Analyst estimates embedded in the dataset show a modest revenue CAGR and rising EPS over the medium term: revenue estimates for 2025 ($21.48B) and longer-term revenue for 2029 ($23.48B) with EPS drifting toward the high-2s by late-decade. Forward metrics such as a forward PE of 9.63x for 2025 and forward EV/EBITDA in the mid-single-digits imply the market is pricing in moderate growth with stable cash generation rather than a dramatic structural re-rating. Those estimates are consistent with an operator that can generate recurring-ish cash flows while investing selectively in adjacent businesses.

Key takeaways#

Halliburton finished FY2024 with a sound cash profile and improving leverage metrics. The juxtaposition of essentially flat revenue (-0.35% YoY) and significantly stronger cash generation (+16.35% FCF growth) is the dominant near-term story. Balance-sheet repair (net debt down 8.56%) combined with continued shareholder returns (dividends and $1.0B buybacks) demonstrates that management is prioritizing cash returns alongside strategic investments in digital and transition-related services.

Margins remained resilient despite cyclical headwinds, suggesting a favorable mix toward higher-value services and effective cost management. The company’s pivot into recurring digital contracts, CCS and geothermal is strategically coherent with its capabilities but will require continued investment and successful commercialization to shift revenue composition materially.

What this means for investors#

Investors should view Halliburton’s FY2024 performance as a cash-focused execution story with a credible strategic tilt toward higher-margin, recurring offerings. The company has the near-term flexibility to (1) sustain shareholder returns, (2) invest in productization of digital services and CCS packages, and (3) reduce leverage — all without stretching the balance sheet. That combination improves optionality but does not eliminate execution and timing risk associated with new-energy businesses.

Where the numbers matter most: free cash flow and leverage are the operational levers that fund the transition. Halliburton’s FY2024 cash metrics give management the runway to pilot CCS and digital frameworks at scale; the critical next-step indicators to watch are the cadence of multi-year framework wins, the progression of recurring digital revenue as a share of total revenue, and margin behavior in targeted offshore/geothermal contracts as they scale.

Risks and monitoring checklist (data-driven)#

Investors and analysts should monitor four measurable items closely: (1) the share of revenue coming from multi-year, service- and subscription-style contracts versus one-off project work; (2) reported R&D or capitalized technology spend disclosures to understand where digital investment lives on the balance sheet; (3) the pace of net-debt reduction and any changes in share-repurchase cadence; and (4) early-margin trends on CCS/geothermal engagements as those business lines scale.

Conclusion#

Halliburton’s FY2024 results present a pragmatic picture: modest top-line pressure, durable margins, and materially improved cash conversion. With $2.42B in free cash flow, a $1.0B buyback program and a $560MM reduction in net debt, management has created financial headroom to pursue a strategic shift toward digital and energy-transition services at measured scale. The crux of the investment story for the next 12–36 months will be whether those new service lines convert pilot wins into multi-year, margin-accretive frameworks. For now, the balance-sheet improvement and cash-generation story are the clearest, most actionable signals in the data.

Sources: Halliburton FY2024 financial statements (filed Feb 12, 2025) and company-reported FY2024 cash-flow and balance-sheet line items.