So that’s why we think it is a really good value proposition.
Ati Modak: Thanks. I’ll turn it over.
Girish Saligram: Thanks, Ati.
Arun Mitra: Thanks, Ati.
Operator: And our next question will come from Doug Becker with Capital One. Please go ahead.
Doug Becker: Thank you. Girish, your commentary seems to once again endorse double-digit revenue growth for next year. I’m just trying to think about North America probably up only modestly, international up double digits. Should we be anchoring more toward the low end of double digits or do you see a path to say mid — like a 15% growth in a favorable environment?
Girish Saligram: Yeah, I think it’s too early, Doug, to jump to a specific number on that, and again, we’ll give detailed guidance in our Q4 call. But look, I think you’ve sort of said it yourself, right? North America, I think it’s a bit of a wait and see, but hopefully a modest expansion and somewhere in probably the low single digits. But the international is where the story is. But international is multiple different regions. We think the Middle East continues to be very robust, and we expect to see solid growth in the Middle East. We think Latin America has experienced tremendous growth this year. We think we’ll be positive next year, but not to the same extent, and then the rest of the geographies. But look, there are a lot of uncertainties as well right now in the macro environment, especially from a geopolitical standpoint.
So I think a tad bit early to get to specifics on what it is, but I think this notion of a much more tepid kind of a North America, but international and double digits I think is an overall and correct thesis.
Doug Becker : That makes sense. And you kind of touched on the fulfillment initiatives a couple times during the call. But how would you characterize — how far along through this process would you characterize it? And just any way to think about what this could mean for margins over an extended period of time?
Girish Saligram: Yeah Doug, when we started talking about this, it’s now we’ve been talking about it for about a year, a year and a half. We’ve always said it’s sort of a three to four year journey. This is fairly complicated stuff where you’re closing several factories, you are shifting work across the planet, you’re creating new supply bases, new logistics channels, you’re qualifying vendors, you’re getting certifications on quality at different facilities for different product lines, etcetera. So it’s a tremendous amount of work. We’ve got a very rigorous plan around every single transfer around supplier qualification. We have built out a quality function in the company that team’s doing a terrific job on, so all of that.
I would say, we’re probably about a year, year and a half into a four year journey. I think what we will start to see is next year, some of the initial benefits of that start to come through. And that’s what we’ve alluded to, is that we will continue to focus on margin expansion and fulfillment’s a part of that. And then the really significant benefits of that I expect will really start to show up in ‘25.
Doug Becker : Makes sense. And then just briefly, slipping one more in, just in terms of the collection issues during the quarter, just any more color on that and how you expect those to resolve going forward?
Girish Saligram: Yeah look, I’ll just say again, we had fully anticipated that it was not so much issues as we knew that we had just some dynamics that would cause relative to Q2 or Q3 that was softer. So we baked that into our guidance. We see that coming back on track in Q4. It was really in Latin America, and we’ll have a little bit more specificity in the Q, but nothing that we are unduly alarmed by. And really what it was is, just one of our customers pushing out things a little bit, but we are very confident that we’ll get back on track in Q4.
Arun Mitra: And Doug, just as a reminder that we had a really good quarter in the second quarter. So we were fully anticipating some headwinds in the third quarter. And it came into fruition, and we expect to recover in the fourth quarter.
Doug Becker : Makes sense. I guess I’m just a little anxious to get to 25% of revenue – net working capital to be 25% of revenue. Thank you very much.
Girish Saligram: You and me both, Doug, but these things do take a little bit of time, so.
Doug Becker : Understood.
Operator: And our next question will come from Jim Rollyson with Raymond James. Please go ahead.
Jim Rollyson: Hey. Good morning, guys, and great job again on this quarter. A lot of questions asked and answered, but a couple of follow-ups. Girish, you talked about offshore, and obviously that’s been a popular topic given the growth rate there. We’ve seen some of your large peers kind of giving some color on their exposure to offshore, and I’m wondering if you would give us maybe just a hint of kind of where Weatherford stands from a revenue percentage that’s tied to offshore these days.
Girish Saligram: Yeah. Jim, first of all, thank you on the quarter. Look, on offshore, we’ve never really given a specific number in terms of how we break it out, because it is a bit of a variable, and it varies by geography. There’s some changes around our segments, etcetera. But look, I think a couple of things that are relevant. First of all, as we talk about our market-leading product lines, right, we have talked about MPD, Cementing Products, TRS, Intervention Services. We’ve always said that these are both onshore and offshore plays, but the value proposition is even more skewed towards the offshore because of the high-risk elements, so we tend to do really well in those businesses, right? We have talked about several of our contract wins that include these product lines, but also product lines such as drilling.
For example, we talked about our win in the Gulf of Thailand with PTTEP a few quarters ago. So we’ve got multiple different product lines that we play in. On market-leading product lines, we’ve got drilling, we’ve got completions. We’ve got multiple different pieces, but we don’t break it out explicitly in terms of what it is. Suffice to say though, look, it is an important part of the business, and we are extremely excited about the continued growth in offshore, because we think it does continue to present opportunities for us to grow, not just with the natural rate of growth, but hopefully create some additional opportunities that we can get a little bit more lift out of.
Jim Rollyson: Yeah, that’s very helpful, color. I appreciate that. And just one follow-up. Notice the Chevron Angola announcement word in your press release. I’m just curious, in light of the recent Chevron news, kind of how you are situated with Chevron as a customer and if you think there’s any potential for that to lead to opportunity down in Latin America given who they are attempting to buy.
