Momentum Accelerates. Cash Flow Improves. Nabors 2Q 2026 Results
HAMILTON, Bermuda, July 28, 2026 /PRNewswire/ -- Nabors Industries Ltd. ("Nabors" or the "Company") (NYSE: NBR) today reported second quarter 2026 operating revenues of $815 million, an increase of approximately 4% from the first quarter. Net loss attributable to Nabors' shareholders for the quarter was $22 million. Adjusted EBITDA for the second quarter was $222 million.
Nabors' second quarter results reflected continued momentum across the international drilling franchise, strengthening Lower 48 activity, and higher free cash flow, supported by disciplined capital allocation and expanding technology adoption.
Selected Financial Information | ||||||
(In millions, except rig activity) | ||||||
Three Months Ended | ||||||
June 30, | March 31, | June 30, | ||||
2026 | 2026 | 2025 | ||||
Operating revenues | $ 814.8 | $ 783.5 | $ 832.8 | |||
Adjusted EBITDA | $ 221.7 | $ 204.8 | $ 248.5 | |||
Adjusted operating income | $ 61.1 | $ 48.6 | $ 73.4 | |||
Adjusted free cash flow | $ 12.3 | $ (48.2) | $ 40.6 | |||
Average rigs working: | ||||||
Lower 48 | 67.8 | 65.3 | 62.4 | |||
International Drilling | 93.4 | 92.6 | 85.9 | |||
Average total rigs working | 171.2 | 167.9 | 158.3 | |||
The quarter ended June 30, 2025 includes revenue of $63 million, EBITDA of $37 million, and operating income of $26 million from Quail Tools, which was sold in August 2025.
2Q 2026 Highlights
- The SANAD land drilling joint venture deployed one newbuild rig in the Kingdom of Saudi Arabia, bringing total newbuild deployments to 16. Three more are scheduled for 2026. In addition, SANAD reactivated another previously suspended rig.
- Nabors added five rigs in the Lower 48 during the second quarter. One of these is drilling Quaise Energy's Project Obsidian, the first commercial superhot geothermal development. The Company's working rig count in this market currently stands at 73, bringing the increase to 15 rigs since November 2025.
- Two of the additional rigs in the Lower 48 were Nabors PACE-X Ultra® rigs. The PACE-X Ultra® combines upgraded drilling capabilities, integrated automation and managed pressure drilling to enable operators to drill increasingly complex wells.
- Canrig deployed the first Canrig TITAN™ ("Titan") fully-automated rig floor wrench, with field results exceeding high performance targets. Titan is designed to deliver greater accuracy, faster speed, and lower cost of ownership than competing units.
Anthony G. Petrello, Nabors Chairman, CEO and President, commented, "Second quarter results reflected another quarter of solid operational and financial progress. All our operating segments exceeded the targets we set.
"In the Lower 48 market, Nabors' average rig count grew and we exceeded the expected exit rate. At the same time, daily gross margin outperformed our guidance. We also gained market share and extended the duration of our contract backlog. Our strategy continues to align us with customers that prioritize high-specification rigs, integrated technology and consistent operating execution in increasingly complex drilling environments.
"In our International Drilling segment, we maintained reliable operations across the Gulf markets in the Middle East. In Saudi Arabia our SANAD joint venture added two rigs, including a previously suspended rig that returned to service. Daily gross margin improved through greater operating efficiency in several geographies and additional SANAD deployments.
"Drilling Solutions' Lower 48 business delivered double-digit sequential revenue growth in the second quarter, with contributions on Nabors rigs as well as third-party rigs. Performance Software, RigCLOUD®, and Managed Pressure Drilling led this growth."
Segment Results
International Drilling adjusted EBITDA was $131 million in the second quarter, compared to $121 million in the first quarter. Daily adjusted gross margin for the second quarter increased by more than $650 from the first quarter, to $17,534. This increase reflects stronger execution, and contributions from SANAD newbuild deployments.
The U.S. Drilling segment reported second quarter adjusted EBITDA of $94 million, compared to $88 million in the previous quarter. Lower 48 results improved as daily margin expanded 5% and the working fleet grew 4%. As expected, results from Offshore and Alaska operations declined sequentially.
Drilling Solutions adjusted EBITDA was $40 million, compared to $39 million in the first quarter. Growth in the Lower 48 market was partially offset by slightly lower international activity, mainly attributable to Surface & Tubular.
Rig Technologies adjusted EBITDA increased to $3 million, compared to $1 million in the previous quarter. Aftermarket revenue accelerated sequentially, reflecting higher customer activity. Capital Equipment revenue also improved as deliveries increased.
Adjusted Free Cash Flow
Consolidated adjusted free cash flow was $12 million in the second quarter. Adjusted free cash flow improved $60 million sequentially, reflecting higher profitability, lower cash interest payments, and seasonal working-capital movements.
Miguel Rodriguez, Nabors CFO, stated, "In the second quarter we delivered free cash flow slightly higher than our expectations. Capital spending for SANAD's newbuild program was lower than forecast, as the timing of a few construction milestones was delayed. Outside SANAD, working capital consumed more cash than expected, impacting free cash flow.
"Our full-year outlook for rig count in the Lower 48 has once again increased. We now expect to exit the third quarter with approximately 74 rigs running and to expand slightly from that level through the remainder of the year. Our revised full-year consolidated capital spending now totals $710 to $730 million, a $25 million reduction at the midpoint of our previous range. For the SANAD newbuild program, capital spending is expected to be in the range of $325 to $335 million. Previously the range was $360 to $380 million.
"We now expect full-year adjusted EBITDA of $920 to $930 million and full-year adjusted free cash flow of $20 to $30 million. This outlook includes expected free cash flow consumption at SANAD of $60 to $80 million. Our priority remains reducing debt and further strengthening the balance sheet while supporting profitable growth, which we believe positions Nabors to enhance long-term shareholder value."
Outlook
Nabors expects the following metrics for the third quarter of 2026:
U.S. Drilling
- Lower 48 average rig count of 73 rigs
- Lower 48 daily adjusted gross margin of approximately $13,800
- Alaska and Gulf of America combined adjusted EBITDA of approximately $11 million
International
- Average rig count of 94 - 96 rigs
- Daily adjusted gross margin of $18,100 - $18,400
Drilling Solutions
- Adjusted EBITDA of approximately $42 million
Rig Technologies
- Adjusted EBITDA of $5 - $6 million
Capital Expenditures
- Capital expenditures of $245 - $255 million, including approximately $130 million for SANAD newbuilds in Saudi Arabia
Adjusted Free Cash Flow
- Adjusted free cash flow consumption of approximately $40 million, including free cash consumption at SANAD of approximately $65 million
Mr. Petrello concluded, "Our performance through the first half of the year has exceeded our expectations. As we look forward, we anticipate second-half adjusted EBITDA to reach an annualized run-rate of $1 billion. Contracted rig additions across our drilling businesses provide strong visibility into that outlook. At the same time, prudent capital allocation should support free cash flow expansion and further strengthening of the balance sheet."
About Nabors Industries
Nabors Industries (NYSE: NBR) is a leading provider of advanced technology for the energy industry. With operations in approximately 20 countries, Nabors has established a global network of people, technology and equipment to deploy solutions that deliver safe, efficient and responsible energy production. By leveraging its core competencies, particularly in drilling, engineering, automation, data science and manufacturing, Nabors aims to innovate the future of energy and enable the transition to a lower-carbon world. Learn more about Nabors and its energy technology leadership: www.nabors.com.
Forward-looking Statements
The information included in this press release includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to a number of risks and uncertainties, as disclosed by Nabors from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, Nabors' actual results may differ materially from those indicated or implied by such forward-looking statements. The forward-looking statements contained in this press release reflect management's estimates and beliefs as of the date of this press release. Nabors does not undertake to update these forward-looking statements.
Non-GAAP Disclaimer
This press release presents certain "non-GAAP" financial measures. The components of these non-GAAP measures are computed by using amounts that are determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Adjusted operating income (loss) represents income (loss) before income taxes, interest expense, investment income (loss), gain on bargain purchase, and other, net. Adjusted EBITDA is computed similarly, but also excludes depreciation and amortization expenses. Adjusted gross margin represents adjusted operating income (loss) plus general and administrative costs, research and engineering costs and depreciation and amortization. In addition, adjusted EBITDA and adjusted operating income (loss) exclude certain cash expenses that the Company is obligated to make. Net debt is calculated as total debt minus the sum of cash, cash equivalents and short-term investments.
Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets, and before cash paid for acquisition-related costs. Management believes that adjusted free cash flow is an important liquidity measure for the Company and that it is useful to investors and management as a measure of the Company's ability to generate cash flow, after reinvesting in the Company for future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders. Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures. Adjusted free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations reported in accordance with GAAP.
Each of these non-GAAP measures has limitations and therefore should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including Adjusted EBITDA, adjusted operating income (loss), net debt, and adjusted free cash flow, because it believes that these financial measures accurately reflect the Company's ongoing profitability, performance and liquidity. Securities analysts and investors also use these measures as some of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. Reconciliations of consolidated adjusted EBITDA and adjusted operating income (loss) to income (loss) before income taxes, net debt to total debt, and adjusted free cash flow to net cash provided by operations, which are their nearest comparable GAAP financial measures, are included in the tables at the end of this press release. We do not provide a forward-looking reconciliation of our outlook for Segment Adjusted EBITDA, Segment Gross Margin or Adjusted Free Cash Flow, as the amount and significance of items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts. These special items could be meaningful.
Investor Contacts: William C. Conroy, CFA, Vice President of Corporate Development & Investor Relations, +1 281-775-2423 or via email [email protected], or Kara Peak, Director of Corporate Development & Investor Relations, +1 281-775-4954 or via email [email protected]. To request investor materials, contact Nabors' corporate headquarters in Hamilton, Bermuda at +441-292-1510 or via email [email protected]
NABORS INDUSTRIES LTD. AND SUBSIDIARIES | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended | Six Months Ended | |||||||||
June 30, | March 31, | June 30, | ||||||||
(In thousands, except per share amounts) | 2026 | 2025 | 2026 | 2026 | 2025 | |||||
Revenues and other income: | ||||||||||
Operating revenues | $ 814,795 | $ 832,788 | $ 783,548 | $ 1,598,343 | $ 1,568,974 | |||||
Investment income (loss) | 2,131 | 6,129 | 2,887 | 5,018 | 12,725 | |||||
Total revenues and other income | 816,926 | 838,917 | 786,435 | 1,603,361 | 1,581,699 | |||||
Costs and other deductions: | ||||||||||
Direct costs | 507,551 | 488,881 | 493,469 | 1,001,020 | 936,181 | |||||
General and administrative expenses | 71,375 | 82,726 | 71,760 | 143,135 | 151,232 | |||||
Research and engineering | 14,209 | 12,722 | 13,506 | 27,715 | 26,757 | |||||
Depreciation and amortization | 160,549 | 175,061 | 156,186 | 316,735 | 329,699 | |||||
Interest expense | 42,678 | 56,081 | 43,761 | 86,439 | 110,407 | |||||
Gain on bargain purchase | - | (3,500) | - | - | (116,499) | |||||
Other, net | 5,682 | 6,074 | (13,393) | (7,711) | 50,864 | |||||
Total costs and other deductions | 802,044 | 818,045 | 765,289 | 1,567,333 | 1,488,641 | |||||
Income (loss) before income taxes | 14,882 | 20,872 | 21,146 | 36,028 | 93,058 | |||||
Income tax expense (benefit) | 16,405 | 23,077 | 16,884 | 33,289 | 38,084 | |||||
Net income (loss) | (1,523) | (2,205) | 4,262 | 2,739 | 54,974 | |||||
Less: Net (income) loss attributable to noncontrolling interest | (20,807) | (28,705) | (19,428) | (40,235) | (52,896) | |||||
Net income (loss) attributable to Nabors | $ (22,330) | $ (30,910) | $ (15,166) | $ (37,496) | $ 2,078 | |||||
Earnings (losses) per share: | ||||||||||
Basic | $ (2.04) | $ (2.71) | $ (1.54) | $ (3.58) | $ (1.01) | |||||
Diluted | $ (2.04) | $ (2.71) | $ (1.54) | $ (3.58) | $ (1.01) | |||||
Weighted-average number of common shares outstanding: | ||||||||||
Basic | 14,273 | 14,083 | 14,213 | 14,243 | 12,271 | |||||
Diluted | 14,273 | 14,083 | 14,213 | 14,243 | 12,271 | |||||
Adjusted EBITDA | $ 221,660 | $ 248,459 | $ 204,813 | $ 426,473 | $ 454,804 | |||||
Adjusted operating income (loss) | $ 61,111 | $ 73,398 | $ 48,627 | $ 109,738 | $ 125,105 | |||||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
June 30, | March 31, | December 31, | ||||
(In thousands) | 2026 | 2026 | 2025 | |||
ASSETS | ||||||
Current assets: | ||||||
Cash and short-term investments | $ 509,833 | $ 500,853 | $ 940,738 | |||
Accounts receivable, net | 443,417 | 417,717 | 391,705 | |||
Other current assets | 243,929 | 234,031 | 219,130 | |||
Total current assets | 1,197,179 | 1,152,601 | 1,551,573 | |||
Property, plant and equipment, net | 2,908,061 | 2,914,886 | 2,920,019 | |||
Other long-term assets | 314,705 | 318,149 | 318,065 | |||
Total assets | $ 4,419,945 | $ 4,385,636 | $ 4,789,657 | |||
LIABILITIES AND EQUITY | ||||||
Current liabilities: | ||||||
Current debt | $ - | $ - | $ 377,492 | |||
Trade accounts payable | 365,472 | 322,837 | 300,467 | |||
Other current liabilities | 268,167 | 262,378 | 315,042 | |||
Total current liabilities | 633,639 | 585,215 | 993,001 | |||
Long-term debt | 2,120,276 | 2,118,729 | 2,117,187 | |||
Other long-term liabilities | 224,152 | 240,163 | 241,826 | |||
Total liabilities | 2,978,067 | 2,944,107 | 3,352,014 | |||
Redeemable noncontrolling interest in subsidiary | 495,886 | 489,129 | 482,446 | |||
Equity: | ||||||
Shareholders' equity | 544,128 | 568,942 | 590,727 | |||
Noncontrolling interest | 401,864 | 383,458 | 364,470 | |||
Total equity | 945,992 | 952,400 | 955,197 | |||
Total liabilities and equity | $ 4,419,945 | $ 4,385,636 | $ 4,789,657 | |||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES | |||||||||||
SEGMENT REPORTING | |||||||||||
(Unaudited) | |||||||||||
The following tables set forth certain information with respect to our reportable segments and rig activity: | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
June 30, | March 31, | June 30, | |||||||||
(In thousands, except rig activity) | 2026 | 2025 | 2026 | 2026 | 2025 | ||||||
Operating revenues: | |||||||||||
U.S. Drilling | $ 252,459 | $ 255,438 | $ 241,144 | $ 493,603 | $ 486,184 | ||||||
International Drilling | 432,497 | 384,970 | 419,496 | 851,993 | 766,688 | ||||||
Drilling Solutions | 110,640 | 170,283 | 106,222 | 216,862 | 263,462 | ||||||
Rig Technologies (1) | 37,485 | 36,527 | 27,222 | 64,707 | 80,692 | ||||||
Other reconciling items (2) | (18,286) | (14,430) | (10,536) | (28,822) | (28,052) | ||||||
Total operating revenues | $ 814,795 | $ 832,788 | $ 783,548 | $ 1,598,343 | $ 1,568,974 | ||||||
Adjusted EBITDA: (3) | |||||||||||
U.S. Drilling | $ 94,081 | $ 101,821 | $ 88,065 | $ 182,146 | $ 194,532 | ||||||
International Drilling | 130,533 | 117,658 | 121,281 | 251,814 | 233,144 | ||||||
Drilling Solutions | 40,013 | 76,501 | 38,662 | 78,675 | 117,354 | ||||||
Rig Technologies (1) | 3,180 | 5,174 | 505 | 3,685 | 10,737 | ||||||
Other reconciling items (4) | (46,147) | (52,695) | (43,700) | (89,847) | (100,963) | ||||||
Total adjusted EBITDA | $ 221,660 | $ 248,459 | $ 204,813 | $ 426,473 | $ 454,804 | ||||||
Adjusted operating income (loss): (5) | |||||||||||
U.S. Drilling | $ 30,961 | $ 39,788 | $ 24,624 | $ 55,585 | $ 71,387 | ||||||
International Drilling | 45,860 | 36,051 | 40,757 | 86,617 | 69,009 | ||||||
Drilling Solutions | 32,125 | 50,365 | 31,872 | 63,997 | 83,278 | ||||||
Rig Technologies (1) | 1,497 | 1,721 | (1,888) | (391) | 6,056 | ||||||
Other reconciling items (4) | (49,332) | (54,527) | (46,738) | (96,070) | (104,625) | ||||||
Total adjusted operating income (loss) | $ 61,111 | $ 73,398 | $ 48,627 | $ 109,738 | $ 125,105 | ||||||
Rig activity: | |||||||||||
Average Rigs Working: (7) | |||||||||||
Lower 48 | 67.8 | 62.4 | 65.3 | 66.5 | 61.5 | ||||||
Other US | 10.0 | 10.0 | 10.0 | 10.0 | 8.8 | ||||||
U.S. Drilling | 77.8 | 72.4 | 75.3 | 76.5 | 70.3 | ||||||
International Drilling | 93.4 | 85.9 | 92.6 | 93.0 | 85.4 | ||||||
Total average rigs working | 171.2 | 158.3 | 167.9 | 169.5 | 155.7 | ||||||
Daily Rig Revenue: (6),(8) | |||||||||||
Lower 48 | $ 33,555 | $ 33,466 | $ 32,653 | $ 33,115 | $ 33,995 | ||||||
Other US | 50,073 | 71,814 | 54,646 | 52,346 | 67,306 | ||||||
U.S. Drilling (10) | 35,680 | 38,761 | 35,573 | 35,627 | 38,180 | ||||||
International Drilling | 50,860 | 49,263 | 50,351 | 50,608 | 49,575 | ||||||
Daily Adjusted Gross Margin: (6),(9) | |||||||||||
Lower 48 | $ 13,784 | $ 13,902 | $ 13,177 | $ 13,488 | $ 14,085 | ||||||
Other US | 17,318 | 32,073 | 19,559 | 18,432 | 31,340 | ||||||
U.S. Drilling (10) | 14,238 | 16,411 | 14,024 | 14,134 | 16,253 | ||||||
International Drilling | 17,534 | 17,534 | 16,880 | 17,211 | 17,478 | ||||||
(1) | Includes our oilfield equipment manufacturing activities. | ||||||
(2) | Represents the elimination of inter-segment transactions related to our Rig Technologies operating segment. | ||||||
(3) | Adjusted EBITDA represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on bargain purchase, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted EBITDA excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP measure, is provided in the table set forth immediately following the heading "Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)". | ||||||
(4) | Represents the elimination of inter-segment transactions and unallocated corporate expenses. | ||||||
(5) | Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on bargain purchase and other, net. Adjusted operating income (loss) is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted operating income (loss) excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP measure, is provided in the table set forth immediately following the heading "Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)". | ||||||
(6) | Rig revenue days represents the number of days the Company's rigs are contracted and performing under a contract during the period. These would typically include days in which operating, standby and move revenue is earned. | ||||||
(7) | Average rigs working represents a measure of the average number of rigs operating during a given period. For example, one rig operating 45 days during a quarter represents approximately 0.5 average rigs working for the quarter. On an annual period, one rig operating 182.5 days represents approximately 0.5 average rigs working for the year. Average rigs working can also be calculated as rig revenue days during the period divided by the number of calendar days in the period. | ||||||
(8) | Daily rig revenue represents operating revenue, divided by the total number of revenue days during the quarter. | ||||||
(9) | Daily adjusted gross margin represents operating revenue less direct costs, divided by the total number of rig revenue days during the quarter. | ||||||
(10) | The U.S. Drilling segment includes the Lower 48, Alaska, and Gulf of Mexico operating areas. | ||||||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES | |||||||||||||||
Reconciliation of Earnings per Share | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | March 31, | June 30, | |||||||||||||
(in thousands, except per share amounts) | 2026 | 2025 | 2026 | 2026 | 2025 | ||||||||||
BASIC EPS: | |||||||||||||||
Net income (loss) (numerator): | |||||||||||||||
Income (loss), net of tax | $ | (1,523) | $ | (2,205) | $ | 4,262 | $ | 2,739 | $ | 54,974 | |||||
Less: net (income) loss attributable to noncontrolling | (20,807) | (28,705) | (19,428) | (40,235) | (52,896) | ||||||||||
Less: accrued distribution on redeemable | (6,757) | (7,264) | (6,683) | (13,440) | (14,448) | ||||||||||
Numerator for basic earnings per share: | |||||||||||||||
Adjusted income (loss), net of tax - basic | $ | (29,087) | $ | (38,174) | $ | (21,849) | $ | (50,936) | $ | (12,370) | |||||
Weighted-average number of shares outstanding - | 14,273 | 14,083 | 14,213 | 14,243 | 12,271 | ||||||||||
Earnings (losses) per share: | |||||||||||||||
Total Basic | $ | (2.04) | $ | (2.71) | $ | (1.54) | $ | (3.58) | $ | (1.01) | |||||
DILUTED EPS: | |||||||||||||||
Adjusted income (loss), net of tax - diluted | $ | (29,087) | $ | (38,174) | $ | (21,849) | $ | (50,936) | $ | (12,370) | |||||
Weighted-average number of shares outstanding - | 14,273 | 14,083 | 14,213 | 14,243 | 12,271 | ||||||||||
Earnings (losses) per share: | |||||||||||||||
Total Diluted | $ | (2.04) | $ | (2.71) | $ | (1.54) | $ | (3.58) | $ | (1.01) | |||||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES | ||||||||||||
NON-GAAP FINANCIAL MEASURES | ||||||||||||
RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT | ||||||||||||
(Unaudited) | ||||||||||||
(In thousands) | ||||||||||||
Three Months Ended June 30, 2026 | ||||||||||||
U.S. | International | Drilling | Rig | Other | Total | |||||||
Adjusted operating income (loss) | $ 30,961 | $ 45,860 | $ 32,125 | $ 1,497 | $ (49,332) | $ 61,111 | ||||||
Depreciation and amortization | 63,120 | 84,673 | 7,888 | 1,683 | 3,185 | 160,549 | ||||||
Adjusted EBITDA | $ 94,081 | $ 130,533 | $ 40,013 | $ 3,180 | $ (46,147) | $ 221,660 | ||||||
Three Months Ended June 30, 2025 | ||||||||||||
U.S. | International | Drilling | Rig | Other | Total | |||||||
Adjusted operating income (loss) | $ 39,788 | $ 36,051 | $ 50,365 | $ 1,721 | $ (54,527) | $ 73,398 | ||||||
Depreciation and amortization | 62,033 | 81,607 | 26,136 | 3,453 | 1,832 | 175,061 | ||||||
Adjusted EBITDA | $ 101,821 | $ 117,658 | $ 76,501 | $ 5,174 | $ (52,695) | $ 248,459 | ||||||
Three Months Ended March 31, 2026 | ||||||||||||
U.S. | International | Drilling | Rig | Other | Total | |||||||
Adjusted operating income (loss) | $ 24,624 | $ 40,757 | $ 31,872 | $ (1,888) | $ (46,738) | $ 48,627 | ||||||
Depreciation and amortization | 63,441 | 80,524 | 6,790 | 2,393 | 3,038 | 156,186 | ||||||
Adjusted EBITDA | $ 88,065 | $ 121,281 | $ 38,662 | $ 505 | $ (43,700) | $ 204,813 | ||||||
Six Months Ended June 30, 2026 | ||||||||||||
U.S. | International | Drilling | Rig | Other | Total | |||||||
Adjusted operating income (loss) | $ 55,585 | $ 86,617 | $ 63,997 | $ (391) | $ (96,070) | $ 109,738 | ||||||
Depreciation and amortization | 126,561 | 165,197 | 14,678 | 4,076 | 6,223 | 316,735 | ||||||
Adjusted EBITDA | $ 182,146 | $ 251,814 | $ 78,675 | $ 3,685 | $ (89,847) | $ 426,473 | ||||||
Six Months Ended June 30, 2025 | ||||||||||||
U.S. | International | Drilling | Rig | Other | Total | |||||||
Adjusted operating income (loss) | $ 71,387 | $ 69,009 | $ 83,278 | $ 6,056 | $ (104,625) | $ 125,105 | ||||||
Depreciation and amortization | 123,145 | 164,135 | 34,076 | 4,681 | 3,662 | 329,699 | ||||||
Adjusted EBITDA | $ 194,532 | $ 233,144 | $ 117,354 | $ 10,737 | $ (100,963) | $ 454,804 | ||||||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES | |||||||||||
NON-GAAP FINANCIAL MEASURES | |||||||||||
RECONCILIATION OF ADJUSTED GROSS MARGIN BY SEGMENT TO ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
June 30, | March 31, | June 30, | |||||||||
(In thousands) | 2026 | 2025 | 2026 | 2026 | 2025 | ||||||
Lower 48 - U.S. Drilling | |||||||||||
Adjusted operating income (loss) | $ 24,722 | $ 21,515 | $ 17,405 | $ 42,127 | $ 40,510 | ||||||
Plus: General and administrative costs | 4,974 | 4,481 | 5,324 | 10,298 | 9,298 | ||||||
Plus: Research and engineering | 1,198 | 888 | 1,143 | 2,341 | 1,711 | ||||||
GAAP Gross Margin | 30,894 | 26,884 | 23,872 | 54,766 | 51,519 | ||||||
Plus: Depreciation and amortization | 54,093 | 52,080 | 53,595 | 107,688 | 105,305 | ||||||
Adjusted gross margin | $ 84,987 | $ 78,964 | $ 77,467 | $ 162,454 | $ 156,824 | ||||||
Other - U.S. Drilling | |||||||||||
Adjusted operating income (loss) | $ 6,239 | $ 18,273 | $ 7,219 | $ 13,458 | $ 30,877 | ||||||
Plus: General and administrative costs | 407 | 896 | 458 | 865 | 1,301 | ||||||
Plus: Research and engineering | 86 | 64 | 80 | 166 | 126 | ||||||
GAAP Gross Margin | 6,732 | 19,233 | 7,757 | 14,489 | 32,304 | ||||||
Plus: Depreciation and amortization | 9,027 | 9,953 | 9,846 | 18,873 | 17,840 | ||||||
Adjusted gross margin | $ 15,759 | $ 29,186 | $ 17,603 | $ 33,362 | $ 50,144 | ||||||
U.S. Drilling | |||||||||||
Adjusted operating income (loss) | $ 30,961 | $ 39,788 | $ 24,624 | $ 55,585 | $ 71,387 | ||||||
Plus: General and administrative costs | 5,381 | 5,377 | 5,782 | 11,163 | 10,599 | ||||||
Plus: Research and engineering | 1,284 | 952 | 1,223 | 2,507 | 1,837 | ||||||
GAAP Gross Margin | 37,626 | 46,117 | 31,629 | 69,255 | 83,823 | ||||||
Plus: Depreciation and amortization | 63,120 | 62,033 | 63,441 | 126,561 | 123,145 | ||||||
Adjusted gross margin | $ 100,746 | $ 108,150 | $ 95,070 | $ 195,816 | $ 206,968 | ||||||
International Drilling | |||||||||||
Adjusted operating income (loss) | $ 45,860 | $ 36,051 | $ 40,757 | $ 86,617 | $ 69,009 | ||||||
Plus: General and administrative costs | 16,748 | 17,867 | 17,609 | 34,357 | 34,245 | ||||||
Plus: Research and engineering | 1,826 | 1,499 | 1,749 | 3,575 | 2,913 | ||||||
GAAP Gross Margin | 64,434 | 55,417 | 60,115 | 124,549 | 106,167 | ||||||
Plus: Depreciation and amortization | 84,673 | 81,607 | 80,524 | 165,197 | 164,135 | ||||||
Adjusted gross margin | $ 149,107 | $ 137,024 | $ 140,639 | $ 289,746 | $ 270,302 | ||||||
Adjusted gross margin by segment represents adjusted operating income (loss) plus general and administrative costs, research and engineering costs and depreciation and amortization. |
NABORS INDUSTRIES LTD. AND SUBSIDIARIES | ||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO NET INCOME (LOSS) | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended | Six Months Ended | |||||||||
June 30, | March 31, | June 30, | ||||||||
(In thousands) | 2026 | 2025 | 2026 | 2026 | 2025 | |||||
Net income (loss) | $ (1,523) | $ (2,205) | $ 4,262 | $ 2,739 | $ 54,974 | |||||
Income tax expense (benefit) | 16,405 | 23,077 | 16,884 | 33,289 | 38,084 | |||||
Income (loss) before income taxes | 14,882 | 20,872 | 21,146 | 36,028 | 93,058 | |||||
Investment (income) loss | (2,131) | (6,129) | (2,887) | (5,018) | (12,725) | |||||
Interest expense | 42,678 | 56,081 | 43,761 | 86,439 | 110,407 | |||||
Gain on bargain purchase | - | (3,500) | - | - | (116,499) | |||||
Other, net | 5,682 | 6,074 | (13,393) | (7,711) | 50,864 | |||||
Adjusted operating income (loss) (1) | 61,111 | 73,398 | 48,627 | 109,738 | 125,105 | |||||
Depreciation and amortization | 160,549 | 175,061 | 156,186 | 316,735 | 329,699 | |||||
Adjusted EBITDA (2) | $ 221,660 | $ 248,459 | $ 204,813 | $ 426,473 | $ 454,804 | |||||
(1) Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on bargain purchase and other, net. Adjusted operating income (loss) is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted operating income (loss) excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. | ||||||||||
(2) Adjusted EBITDA represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, gain on bargain purchase, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted EBITDA excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. | ||||||||||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES | ||||||
RECONCILIATION OF NET DEBT TO TOTAL DEBT | ||||||
(Unaudited) | ||||||
June 30, | March 31, | December 31, | ||||
(In thousands) | 2026 | 2026 | 2025 | |||
Current debt | $ - | $ - | $ 377,492 | |||
Long-term debt | 2,120,276 | 2,118,729 | 2,117,187 | |||
Total Debt | 2,120,276 | 2,118,729 | 2,494,679 | |||
Less: Cash and short-term investments | 509,833 | 500,853 | 940,738 | |||
Net Debt | $ 1,610,443 | $ 1,617,876 | $ 1,553,941 | |||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES | ||||||||||
RECONCILIATION OF ADJUSTED FREE CASH FLOW TO | ||||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended | Six Months Ended | |||||||||
June 30, | March 31, | June 30, | ||||||||
(In thousands) | 2026 | 2025 | 2026 | 2026 | 2025 | |||||
Net cash provided by operating activities | $ 135,242 | $ 151,810 | $ 113,339 | $ 248,581 | $ 239,545 | |||||
Add: Capital expenditures, net of proceeds from sales | (122,900) | (141,849) | (161,558) | (284,458) | (301,010) | |||||
Free cash flow | $ 12,342 | $ 9,961 | $ (48,219) | $ (35,877) | $ (61,465) | |||||
Cash paid for acquisition related costs (1) | - | 30,635 | - | - | 40,816 | |||||
Adjusted free cash flow | $ 12,342 | $ 40,596 | $ (48,219) | $ (35,877) | $ (20,649) | |||||
(1) Cash paid related to the Parker Drilling acquisition | ||||||||||
Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets, and before cash paid for acquisition related costs. Management believes that adjusted free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of the company's ability to generate cash flow, after reinvesting in the company for future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders. Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures. Adjusted free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations reported in accordance with GAAP. | ||||||||||
NABORS INDUSTRIES LTD. AND SUBSIDIARIES | ||||
NON-GAAP FINANCIAL MEASURES | ||||
RECONCILIATION OF QUAIL TOOLS FINANCIAL MEASURES | ||||
(Unaudited) | ||||
Three months | ||||
June 30, | ||||
(In thousands) | 2025 | |||
Drilling Solutions operating revenues | $ 170,283 | |||
Less: remaining Drilling Solutions business | (107,701) | |||
Quail Tools operating revenues | $ 62,582 | |||
Drilling Solutions adjusted operating income (loss) | $ 50,365 | |||
Less: remaining Drilling Solutions business | (24,075) | |||
Quail Tools adjusted operating income (loss) | $ 26,290 | |||
Quail Tools depreciation and amortization | 10,722 | |||
Quail Tools adjusted EBITDA | $ 37,012 | |||
SOURCE Nabors Industries Ltd.
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