Financial Performance & Acquisition - Nabors reported adjusted EBITDA of $248.459 million for the three months ended June 30, 2025[86] - Nabors Drilling Solutions contributed 25% of total adjusted EBITDA from operations in 2Q[24] - Parker Wellbore acquisition is on track to deliver $40 million of synergies in 2025 and $60 million run-rate in 2026[18] - Parker Wellbore is expected to generate run-rate adjusted EBITDA plus synergies of $200 million, up from $190 million[18] - Adjusted EBITDA less CAPEX of $125 million is expected from Parker Wellbore, up from $110 million[19] Segment Performance - International Drilling daily adjusted gross margin was greater than $17,500 in 2Q[24] - Lower 48 rigs generated daily adjusted gross margin of approximately $13,900[24] - Nabors Drilling Solutions adjusted gross margin was approximately 53% in 2Q[24] International Expansion - Nabors has 52 active rigs in KSA (Kingdom of Saudi Arabia) operated by SANAD, a JV with Saudi Aramco[20] - The company deployed 2 rigs in Saudi Arabia and 2 rigs in Kuwait in 2Q, with additional deployments planned in 3Q in Saudi Arabia, Kuwait, and India, plus a restart in Colombia[24] - Nabors is actively pursuing multiple opportunities for additional international rigs through YE 2025[38] Rig Count & Utilization - As of June 30, 2025, Nabors had a total rig fleet of 310, with 159 rigs on revenue, resulting in a 51% utilization rate[84] - In the U S Lower-48, Nabors had 110 high-spec rigs, with 60 on revenue, resulting in a 55% utilization rate[84]

Core Viewpoint - Nabors Industries reported a quarterly loss of $2.71 per share, which was worse than the Zacks Consensus Estimate of a loss of $2.05, but an improvement from a loss of $4.29 per share a year ago [1] Financial Performance - The company posted revenues of $832.79 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 0.18% and showing an increase from $734.8 million in the same quarter last year [2] - Over the last four quarters, Nabors has not surpassed consensus EPS estimates, indicating ongoing challenges in meeting market expectations [2] Stock Performance - Nabors shares have declined approximately 38.3% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), suggesting it is expected to underperform the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$2.00 on revenues of $845.35 million, and for the current fiscal year, it is -$3.53 on revenues of $3.27 billion [7] - The trend of estimate revisions for Nabors has been unfavorable leading up to the earnings release, which may impact future stock performance [6] Industry Context - The Oil and Gas - Drilling industry, to which Nabors belongs, is currently ranked in the bottom 5% of over 250 Zacks industries, indicating a challenging environment for companies in this sector [8]

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) [Q2 2025 Financial Performance](index=1&type=section&id=Q2%202025%20Financial%20Performance) Nabors reported a significant sequential increase in operating revenues to $833 million for the second quarter of 2025, recording a net loss of $31 million, in contrast to the prior quarter's net income inflated by a one-time gain from the Parker transaction, while Adjusted EBITDA showed strong sequential growth to $248 million Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Operating Revenues | $833 million | $736 million | | Net Income (Loss) Attributable to Nabors | ($31 million) | $33 million | | Loss (Earnings) per Diluted Share | ($2.71) | $2.18 | | Adjusted EBITDA | $248 million | $206 million | - The first quarter's net income included a one-time, non-cash net gain of **$113.0 million**, or **$9.68 per diluted share**, from the Parker transaction, which explains the significant difference in net income between Q1 and Q2[2](index=2&type=chunk) [Q2 2025 Operational Highlights](index=1&type=section&id=Q2%202025%20Operational%20Highlights) The second quarter was marked by the successful integration of Parker Wellbore, which materially contributed to financial results and achieved targeted cost synergies, alongside the SANAD joint venture's expansion, new rig deployments, and several drilling records in major U.S. basins - Key operational achievements in Q2 2025 include: - **SANAD JV Expansion:** Deployed two newbuild rigs in Saudi Arabia, bringing the total to **twelve**, and received an award for **five** more newbuilds - **Kuwait Reactivations:** Commenced operations for **three** high-specification rigs under multiyear contracts - **Drilling Records:** Set multiple records for lateral wellbore lengths with PACE® series SmartRigs® in the Bakken, Haynesville, and Eagle Ford basins - **Parker Wellbore Integration:** Made significant progress integrating the acquired businesses, which contributed materially to financial results and supported the **$40 million** cost synergy target for 2025[4](index=4&type=chunk)[5](index=5&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) Adjusted EBITDA grew sequentially across most segments, significantly boosted by the full-quarter contribution from the acquired Parker operations, with International Drilling seeing modest growth, U.S. Drilling improving due to a higher rig count, Drilling Solutions experiencing a substantial increase, and Rig Technologies seeing a slight decline Adjusted EBITDA by Segment (Q2 2025 vs. Q1 2025) | Segment | Q2 2025 Adjusted EBITDA | Q1 2025 Adjusted EBITDA | Change | | :--- | :--- | :--- | :--- | | International Drilling | $117.7 million | $115.5 million | +$2.2M | | U.S. Drilling | $101.8 million | $92.7 million | +$9.1M | | Drilling Solutions | $76.5 million | $40.9 million | +$35.6M | | Rig Technologies | $5.2 million | $5.6 million | -$0.4M | - The addition of Parker's operations was a primary driver of growth, especially in the Drilling Solutions segment, which now comprises over **25%** of adjusted EBITDA from operating segments[9](index=9&type=chunk)[11](index=11&type=chunk) [Cash Flow Analysis](index=3&type=section&id=Adjusted%20Free%20Cash%20Flow) The company generated $41 million in adjusted free cash flow, a significant turnaround from a $61 million consumption in the prior quarter, driven by lower quarterly cash interest payments and improved customer collections, offsetting an increase in capital expenditures, and remaining on track to meet its full-year adjusted free cash flow target of $80 million Adjusted Free Cash Flow | Period | Adjusted Free Cash Flow | | :--- | :--- | | Q2 2025 | $41 million | | Q1 2025 | ($61 million) | - The improvement was achieved despite significantly lower-than-expected collections from the main customer in Mexico, as this was offset by higher payments from other clients[12](index=12&type=chunk) - The company forecasts similar adjusted free cash flow in Q3 and anticipates reaching its **$80 million** target for the full year, assuming expected collections from Mexico materialize[16](index=16&type=chunk) [Q3 2025 Outlook](index=4&type=section&id=Outlook) Nabors anticipates its Lower 48 rig count and pricing to stabilize in the second half of the year, with Q3 U.S. Drilling adjusted EBITDA expected to be in line with Q2, International segment's daily gross margin projected to increase, and full-year 2025 capital expenditures forecasted between $700-$710 million, including significant investment in SANAD newbuilds Q3 2025 Guidance | Segment/Metric | Q3 2025 Outlook | | :--- | :--- | | **U.S. Drilling** | | | Lower 48 Average Rig Count | 57 - 59 rigs | | Lower 48 Daily Adjusted Gross Margin | ~$13,300 | | Alaska & GoM Combined Adj. EBITDA | ~$26 million | | **International** | | | Average Rig Count | 87 - 88 rigs | | Daily Adjusted Gross Margin | ~$17,900 | | **Drilling Solutions** | Adj. EBITDA approx. in line with Q2 | | **Rig Technologies** | Adj. EBITDA up ~$2 - $3 million from Q2 | Capital Expenditures and Free Cash Flow Outlook | Metric | Outlook | | :--- | :--- | | Q3 2025 Capital Expenditures | $200 - $210 million | | Full-Year 2025 Capital Expenditures | $700 - $710 million | | Q3 2025 Adjusted Free Cash Flow | In line with Q2 | [Financial Statements](index=7&type=section&id=Financial%20Statements) [Condensed Consolidated Statements of Income (Loss)](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20(LOSS)) For the second quarter of 2025, Nabors reported operating revenues of $832.8 million and a net loss attributable to shareholders of $30.9 million, or ($2.71) per diluted share, compared to a net income of $33.0 million in Q1 2025, which was influenced by a significant non-cash gain on bargain purchase related to the Parker acquisition Income Statement Highlights (Three Months Ended June 30, 2025) | Metric | Q2 2025 (In thousands) | Q1 2025 (In thousands) | | :--- | :--- | :--- | | Operating revenues | $832,788 | $736,186 | | Income (loss) before income taxes | $20,872 | $72,186 | | Net income (loss) attributable to Nabors | $(30,910) | $32,988 | | Diluted earnings (losses) per share | $(2.71) | $2.18 | | Adjusted EBITDA | $248,459 | $206,345 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, the company's balance sheet showed total assets of $5.04 billion, slightly down from the previous quarter, with cash and short-term investments at $387.4 million, long-term debt stable at $2.67 billion, and total equity at $640.3 million Balance Sheet Highlights (In thousands) | Metric | June 30, 2025 (In thousands) | March 31, 2025 (In thousands) | | :--- | :--- | :--- | | Cash and short-term investments | $387,355 | $404,109 | | Total current assets | $1,196,891 | $1,198,818 | | Total assets | $5,038,663 | $5,049,684 | | Long-term debt | $2,672,820 | $2,685,169 | | Total liabilities | $3,591,993 | $3,604,307 | | Total equity | $640,328 | $649,734 | [Segment Reporting](index=9&type=section&id=SEGMENT%20REPORTING) In Q2 2025, the International Drilling segment was the largest contributor to both operating revenues ($385.0 million) and adjusted EBITDA ($117.7 million), while the Drilling Solutions segment saw its revenue more than double sequentially to $170.3 million due to the Parker acquisition, and the average number of working rigs increased to 158.3 globally Q2 2025 Operating Revenues by Segment (In thousands) | Segment | Q2 2025 (In thousands) | Q1 2025 (In thousands) | | :--- | :--- | :--- | | U.S. Drilling | $255,438 | $230,746 | | International Drilling | $384,970 | $381,718 | | Drilling Solutions | $170,283 | $93,179 | | Rig Technologies | $36,527 | $44,165 | Q2 2025 Adjusted EBITDA by Segment (In thousands) | Segment | Q2 2025 (In thousands) | Q1 2025 (In thousands) | | :--- | :--- | :--- | | U.S. Drilling | $101,821 | $92,711 | | International Drilling | $117,658 | $115,486 | | Drilling Solutions | $76,501 | $40,853 | | Rig Technologies | $5,174 | $5,563 | Q2 2025 Average Rigs Working | Segment | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | U.S. Drilling | 72.4 | 68.2 | | International Drilling | 85.9 | 85.0 | | **Total** | **158.3** | **153.2** | [Reconciliation of Non-GAAP Financial Measures](index=11&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) [Reconciliation of Earnings per Share](index=11&type=section&id=Reconciliation%20of%20Earnings%20per%20Share) This section details the calculation of basic and diluted earnings per share (EPS), where for Q2 2025, the net loss attributable to Nabors of $30.9 million, after adjustments, resulted in a basic and diluted loss per share of ($2.71) based on 14,083 weighted-average shares outstanding - Due to the net loss position in Q2 2025, there was no dilutive effect from convertible notes or potential common shares, resulting in basic and diluted EPS being identical[37](index=37&type=chunk) [Reconciliation of Segment EBITDA and Operating Income](index=12&type=section&id=RECONCILIATION%20OF%20ADJUSTED%20EBITDA%20BY%20SEGMENT%20TO%20ADJUSTED%20OPERATING%20INCOME%20(LOSS)%20BY%20SEGMENT) This table reconciles adjusted operating income to adjusted EBITDA for each business segment by adding back depreciation and amortization, showing that for Q2 2025, total adjusted EBITDA was $248.5 million, derived from $73.4 million in total adjusted operating income and $175.1 million in total depreciation and amortization Total Company Reconciliation for Q2 2025 (In thousands) | Metric | Amount (In thousands) | | :--- | :--- | | Adjusted operating income (loss) | $73,398 | | Depreciation and amortization | $175,061 | | **Adjusted EBITDA** | **$248,459** | [Reconciliation of Segment Gross Margin and Operating Income](index=13&type=section&id=RECONCILIATION%20OF%20ADJUSTED%20GROSS%20MARGIN%20BY%20SEGMENT%20TO%20ADJUSTED%20OPERATING%20INCOME%20(LOSS)%20BY%20SEGMENT) This section reconciles adjusted operating income to adjusted gross margin for the U.S. and International Drilling segments by adding back G&A, R&E, and depreciation & amortization costs, with Q2 2025 showing the U.S. Drilling segment's adjusted gross margin at $108.2 million and the International Drilling segment's at $137.0 million - Adjusted gross margin, a key performance metric for drilling segments, is calculated by adding back general and administrative costs, research and engineering costs, and depreciation and amortization to the segment's adjusted operating income[39](index=39&type=chunk) [Reconciliation to Net Income (Loss)](index=14&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20FINANCIAL%20MEASURES%20TO%20NET%20INCOME%20(LOSS)) This table provides a clear reconciliation from the GAAP measure of Net Income (Loss) to the non-GAAP measures of Adjusted Operating Income and Adjusted EBITDA, where for Q2 2025, a net loss of $2.2 million was adjusted for various items to arrive at an Adjusted EBITDA of $248.5 million Reconciliation from Net Income to Adjusted EBITDA for Q2 2025 (In thousands) | Metric | Amount (In thousands) | | :--- | :--- | | Net income (loss) | $(2,205) | | Adjustments (Taxes, Interest, etc.) | $81,714 | | Adjusted operating income (loss) | $73,398 | | Depreciation and amortization | $175,061 | | **Adjusted EBITDA** | **$248,459** | [Reconciliation of Net Debt](index=15&type=section&id=RECONCILIATION%20OF%20NET%20DEBT%20TO%20TOTAL%20DEBT) Net debt is calculated as total long-term debt less cash and short-term investments, with Nabors' net debt as of June 30, 2025, being approximately $2.29 billion, remaining relatively stable compared to the previous quarter Net Debt Calculation (In thousands) | Metric | June 30, 2025 (In thousands) | March 31, 2025 (In thousands) | | :--- | :--- | :--- | | Long-term debt | $2,672,820 | $2,685,169 | | Less: Cash and short-term investments | $(387,355) | $(404,109) | | **Net Debt** | **$2,285,465** | **$2,281,060** | [Reconciliation of Adjusted Free Cash Flow](index=16&type=section&id=RECONCILIATION%20OF%20ADJUSTED%20FREE%20CASH%20FLOW%20TO%20NET%20CASH%20PROVIDED%20BY%20OPERATING%20ACTIVITIES) This table reconciles net cash from operating activities to adjusted free cash flow, showing that for Q2 2025, net cash from operations was $151.8 million, and after subtracting net capital expenditures and adding back cash paid for acquisition-related costs, the adjusted free cash flow was $40.6 million Adjusted Free Cash Flow Reconciliation for Q2 2025 (In thousands) | Metric | Amount (In thousands) | | :--- | :--- | | Net cash provided by operating activities | $151,810 | | Less: Capital expenditures, net | $(141,849) | | Free cash flow | $9,961 | | Add: Cash paid for acquisition related costs | $30,635 | | **Adjusted free cash flow** | **$40,596** |

Core Insights - Nabors Industries reported second quarter 2025 operating revenues of $833 million, an increase from $736 million in the first quarter, but incurred a net loss of $31 million compared to a net income of $33 million in the previous quarter [1][2][3] - The adjusted EBITDA for the second quarter was $248 million, up from $206 million in the first quarter, indicating improved operational performance [1][2][3] Financial Performance - The company experienced a loss per diluted share of $2.71 in the second quarter, contrasting with earnings per diluted share of $2.18 in the first quarter, which included a one-time gain from the Parker transaction [1][3] - Adjusted free cash flow improved to $41 million in the second quarter from a cash consumption of $61 million in the prior quarter, aided by lower cash interest payments and better customer collections [10][15] Segment Performance - International Drilling adjusted EBITDA rose to $117.7 million from $115.5 million in the previous quarter, with an average rig count increase driven by newbuild rigs in Saudi Arabia and Kuwait [7][8] - The U.S. Drilling segment reported adjusted EBITDA of $101.8 million, up from $92.7 million, with contributions from all three operations, despite a flat to declining rig market in oil-focused basins [8][9] - Drilling Solutions adjusted EBITDA significantly increased to $76.5 million, primarily due to the addition of Parker's operations, while Rig Technologies saw a slight decline to $5.2 million [9][10] Strategic Developments - The acquisition of Parker Wellbore is contributing positively to Nabors' financial results, with expectations of achieving $40 million in cost synergies for 2025 [3][12][13] - Recent deployments of high-spec rigs in the Middle East and the SANAD newbuild program are expected to drive growth in the International Drilling segment [4][13] Outlook - The company anticipates that adjusted EBITDA for the third quarter will be approximately in line with the second quarter, with expectations for stable rig counts in the Lower 48 and continued strength in natural gas drilling [16][18] - Capital expenditures are projected to be between $200 million and $210 million for the quarter, with a full-year estimate of $700 million to $710 million [24][18]

The drilling industry, especially in the U.S., is facing a tough near-term outlook. Rig counts have continued to drop since the April tariff panic, and the market expects things to get even worse in 2026. That's exactly when contrarian investors should pay Analyst's Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Short position through short-selling of the stock, or purchase of put options or similar derivatives in NBR ove ...

Core Viewpoint - Nabors Industries Ltd. has expanded its Board of Directors by appointing David J. Tudor, enhancing its strategic direction with his extensive experience in the energy industry [1][4]. Company Overview - Nabors Industries is a leading provider of advanced technology for the energy industry, operating in over 20 countries and focusing on safe, efficient, and responsible energy production [5]. Board Appointment Details - David J. Tudor, age 66, has been appointed to the Board effective July 24, 2025, and will serve on both the Audit and Risk Oversight Committees [1][2]. - Tudor has been the CEO and General Manager of Associated Electric Cooperative Inc. since 2016, previously held leadership roles in various energy companies, and has a strong background in the energy sector [2][3]. Leadership Insights - Anthony Petrello, Chairman and CEO of Nabors, expressed confidence that Tudor's leadership and industry knowledge will benefit Nabors and its shareholders [4].

Core Viewpoint - Nabors Industries Ltd. (NBR) is expected to report a second-quarter 2025 loss of $2.05 per share on revenues of $831.2 million, reflecting a year-over-year revenue increase of 13.13% and a bottom-line increase of 52.21% [1][3][8]. Group 1: Recent Performance - In the last reported quarter, NBR's loss per share was $7.5, which was $2.64 wider than the consensus estimate, primarily due to lower adjusted operating income from its U.S. Drilling segment [2]. - Operating revenues for the last quarter were $736.2 million, exceeding the Zacks Consensus Estimate of $718 million, driven by stronger contributions from the International Drilling segment [2]. - NBR has missed the Zacks Consensus Estimate in each of the trailing four quarters, with an average negative surprise of 169.68% [2]. Group 2: Revenue and Cost Factors - The Zacks Consensus Estimate for second-quarter revenues is projected to be $831.2 million, up from $743 million in the year-ago quarter, attributed to higher contributions from U.S. Drilling, International Drilling, and Drilling Solutions segments [4]. - Direct costs are expected to rise, with depreciation and amortization costs projected to reach $201.1 million, up from $160.1 million in the previous year [5]. - Interest expenses are anticipated to increase from $51.5 million to $56.8 million, and general and administrative expenses are expected to rise from $62.2 million to $64.1 million [5]. Group 3: Earnings Prediction and Model Insights - The Zacks model does not predict an earnings beat for NBR this time, as the Earnings ESP is -2.60% [6][7]. - NBR currently holds a Zacks Rank of 5 (Sell), indicating a less favorable outlook [9].

Core Points - Nabors Industries Ltd. will discuss its operating results for the second quarter ended June 30, 2025, on July 30, 2025, at 10:00 a.m. Central Time [1] - The earnings release will be available after the market closes on July 29, 2025 [1] Conference Call Details - The conference call will be accessible via dial-in numbers for the US, Canada, and international participants [2] - A recording of the conference call will be available for replay for one week until August 6, 2025 [3] - A live audio webcast of the conference call will be available on Nabors' website [4] Company Overview - Nabors Industries Ltd. is a leading provider of advanced technology for the energy industry, operating in over 15 countries [5] - The company focuses on drilling, engineering, automation, data science, and manufacturing to innovate energy solutions and support the transition to a lower-carbon world [5]

Core Insights - Nabors Industries Ltd. (NBR) has experienced a significant stock decline of 56% over the past year, underperforming compared to peers in the oil and gas drilling sector [1][13] - The company faces multiple operational and financial challenges, raising concerns about its near-term outlook and ability to stabilize and grow [2] Financial Performance - The U.S. Drilling segment reported a decrease in adjusted EBITDA from $105.8 million in Q4 2024 to $92.7 million in Q1 2025, attributed to lower rig counts and operational inefficiencies [3] - Daily margins in the Lower 48 states fell from $14,940 to $14,276 due to increased rig churn, leading to higher costs and contract instability [3][4] - Management anticipates only a marginal recovery in daily margins to $14,100 in Q2 2025, indicating ongoing pressure in the U.S. market, which accounts for 44% of total drilling revenues [4] Geopolitical and Market Risks - Nabors suspended operations in Russia due to U.S. sanctions, incurring $28.6 million in non-cash charges, and does not expect to resume activities there [5] - The company faces challenges in Colombia and Mexico, including delayed customer payments, with 20% of international rigs located in volatile regions, increasing exposure to geopolitical risks [5] Debt and Cash Flow Concerns - Nabors' net debt stood at $2.28 billion in Q1 2025, with adjusted free cash flow showing a usage of $71 million [6] - The company has a capital expenditure target of $770-$780 million for 2025, which includes $360 million for SANAD newbuilds, constraining near-term cash flow [6] - The Parker acquisition added $178 million in debt, and rising interest rates pose refinancing risks, raising concerns about financial stability [6] Dependency on Joint Ventures - The SANAD joint venture is crucial for growth, contributing significantly to international EBITDA, but its success is contingent on Saudi Aramco's capital discipline [7] - Any slowdown in Aramco's gas-focused drilling, which constitutes 75% of SANAD's activity, could jeopardize projections [7] Integration and Operational Challenges - The Parker acquisition, while expected to generate $40 million in synergies, introduces integration complexities and costs, with $14 million incurred in the first quarter [9] - Parker's negative free cash flow of $10 million in Q1 and a $60 million capex target for 2025 further strain liquidity [9] Customer and Revenue Risks - Nabors faces receivables issues, particularly in Mexico, where $20 million in expected collections were delayed [11] - The company's reliance on a few key clients increases vulnerability to payment delays or contract cancellations, contrasting with peers that have diversified their customer bases [11] Market Position and Comparison - Over the past year, Nabors' share price has dropped 56.4%, significantly more than declines of 45.7%, 50.9%, and 39.1% for peers Transocean, Helmerich & Payne, and Patterson-UTI Energy, respectively [13] - The overall Oils-Energy sector saw a rise of 3.6%, highlighting Nabors' underperformance relative to both its industry peers and the broader market [13]

Core Insights - Nabors Industries Ltd. (NYSE: NBR) is expected to experience significant revenue growth due to investments in automated drilling and the expansion of the offshore drilling market [1] - The company is anticipated to see growth in free cash flow as a result of recent acquisitions [1] Company Analysis - Nabors Industries is focusing on automated drilling technologies, which positions the company to capitalize on the increasing demand in the offshore drilling sector [1] - The financial analysis includes various metrics such as cash flow statements, unlevered free cash flow, cost of capital, and WACC, which are essential for evaluating the company's future performance [1] Market Context - The offshore drilling market is projected to grow, providing a favorable environment for companies like Nabors Industries that are investing in advanced drilling technologies [1]