Outperforming expectations in 2022
The outstanding results of 2022 are a concrete marker of the success of our turnaround initiatives for Weatherford. We are incredibly proud of and grateful to our 17,700 One Weatherford team members who have come together to deliver a year of many firsts and excellent operating results. Our commercial wins, revenue growth, margin expansion, and free cash flow are all demonstrative of exceptional performance.
There are many significant milestones in these results – the first time in over three decades that we generated positive free cash flow for three consecutive years, achieving the lowest net leverage ratio in more than 15 years, growing revenue year-over-year by 19%, the highest growth rate in over 10 years, and generating positive net income of $26 million, a first in over 10 years. These results clearly demonstrate the effectiveness of our new operating paradigm and reaffirm our ability to sustainably expand margins over the cycle while generating positive free cash flow.
With this, we can confidently say that the turnaround at Weatherford is complete. We are the new Weatherford – an organization that continues to deliver differentiation in technology and people, but now with the culture, leadership, and operating paradigm around consistency and credibility of performance.
Innovation and excellence in execution has been at the heart of what we do for our customers. The ever-increasing adoption of our market-leading technology is a testament to our ability to maximize value for customers at all stages of the well lifecycle. Our market-leading offerings of Managed Pressure Drilling, Drilling Services, Tubular Running Services, Cementation Products, and Intervention Services & Drilling Tools have enabled us to offer a unique combination of differentiated technologies, as we expand into new markets and augment our revenue base. Additionally, the seamless integration of our digital offerings and the ability to provide integrated solutions across our segments will be key to growth in our core operations and in the energy transition.
In 2022, we also added strategic partnerships to deepen our digital value proposition. We entered into a strategic partnership with Ardyne to significantly reduce rig time in complex well environments with the use of specialized single-trip abandonment and slot-recovery technology. We entered into a multi-year agreement with DataRobot to provide machine learning and artificial intelligence offerings with our Digital Solutions portfolio. Our strategic agreement with Kwantis enabled us to strengthen our Centro™ well construction optimization platform.
With the strong finish of 2022, we believe that 2023 will mark a new phase for Weatherford as we shift from being a turnaround story to a true value-creating engine. Our mindset in this new phase is evolving to a longer-range vision of creating a business that will withstand cycles and perform as the sector evolves while maintaining our commitment to transparency, credibility, and performance.
At the onset of 2022, we laid out our focus areas for the year of Fulfillment, Directed Growth, Excellence in Execution, and Simplification. The intensity with which we executed across these focus areas helped drive outstanding performance.
We continued our multiyear initiative and have begun to fundamentally change the Company’s manufacturing, sourcing, and repair platform. In 2022, we identified our new flagship centers, put in place a new logistics management system, and continued to make progress on facility optimization, as we exited over 12% of our operating facilities since 2021.
This focus area was to ensure that incremental revenues must provide margin lift. This was complemented with a company-wide initiative on driving price consistently and systematically as we offset the inflationary pressures from our suppliers and wage increases. As a result, in 2022, we achieved a 43% Adjusted EBITDA growth and 320 basis points margin expansion on the back of 19% revenue growth.
 This is a non-GAAP financial measure. Please refer to the appendix below included herein for a reconciliation of GAAP to the non-GAAP financial measures.
Excellence in Execution
This focus area aimed at improving enterprise effectiveness in all our operations. We saw improved inventory efficiency evidenced by an 11-day reduction in DSI year-over-year, in a year where revenue increased by 19%. Overall, net working capital days improved by 13 days to 91 days, an impressive achievement in a growth environment.
Several global and localized initiatives aimed at increasing operational efficiency by delayering and driving more accountability across the organization. As a result, our overhead costs as a percentage of revenue declined over 280 basis points on a full-year basis.
As we move towards the next phase of our journey, our strategic priorities will be the guiding lights to our future performance. These imperatives are broader and will influence our strategy over the long-term.
We successfully demonstrated in 2022 that we could achieve growth along with margin expansion and positive cash flow. For 2023 and beyond, we are driving to ensure cash flow generation is cycle-agnostic. While taking advantage of the up cycle, we will drive cost efficiencies and technology differentiation to provide greater leverage now and enhanced support in a different cycle.
Our goal is to upskill and develop our team to meet industry challenges and continue to lead. We will drive greater focus and investment in training and development across all levels of the Company. But like all other investments, this will also have a rigorous payback lens. We want to attract great talent, but more importantly, develop, engage, and retain our team to grow their careers in the manner they aspire to.
Customers will continue to be the focal point of everything we do. As we build our opportunity pipeline, we want to ensure that we employ robust processes, solutions, technologies, and data that help us achieve both customer success and satisfaction. As we forge ahead, we want to look at building a sticky customer base through our approach of delivering services. Despite the continuing logistical challenges faced by the industry, we will endeavor to maintain our uptime for our customers and minimize our total incident rate.
Efficiency and waste elimination will be the motives that guide all our internal processes. Our ultimate goal is to provide value to the customer, and this will be achieved on the back of nimble and agile operations with a combination of various factors such as maximizing the value per dollar spent on support costs, increasing asset utilization efficiency, and tightening the working capital cycle. This is a very significant change for our Company as we bring together disparate systems, processes, and workflows built on myriad of acquisitions and become a more integrated company.
Creating the Future
Innovation is the key tenet to achieving this objective. Our focus will be to enable our people to understand the needs of our customers and to introduce new products and services that create a unique value proposition for our customers and differentiate us in the market. We will continue to actively engage in further building our core products and services, energy transition, and digital portfolios, thereby positioning ourselves for the next decade.