NOV(NOV) - 2025 Q1 - Quarterly Results

First Quarter 2025 Results Overview This section provides a comprehensive overview of NOV Inc.'s financial performance and strategic outlook for the first quarter of 2025, highlighting key achievements and future expectations First Quarter 2025 Financial Performance NOV Inc. achieved solid first-quarter 2025 results, with adjusted EBITDA and cash flow growth despite a slight year-over-year revenue decline, alongside significant capital returns to shareholders Key Financial Data for Q1 2025 (Year-over-Year) | Metric | Q1 2025 | Q1 2024 | Change | Change Rate | Reference | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $2.10 billion | $2.14 billion | -$0.04 billion | -2% | [3] | | Net Income | $73 million | $119 million | -$46 million | -39% | [3, 6] | | Earnings Per Share (EPS) | $0.19 | $0.31 | -$0.12 | -39% | [3, 6] | | Operating Profit | $152 million | $162 million | -$10 million | -6% | [3] | | Adjusted EBITDA | $252 million | $241 million | +$11 million | +5% | [3, 6] | | Cash Flow from Operations | $135 million | -$78 million | +$213 million | N/A | [6] | | Free Cash Flow | $51 million | -$147 million | +$198 million | N/A | [6] | - The company overcame revenue decline and improved adjusted EBITDA margins by executing large offshore production technology backlogs, accelerating adoption of differentiated new technologies, and continuously improving operational efficiencies[4] - Capital of $109 million was returned to shareholders this quarter through opportunistic share repurchases and dividends[4][6] CEO Commentary & Business Outlook The CEO highlighted the company's execution in an uncertain macroeconomic environment and provided an outlook for future activities and second-quarter performance - Macroeconomic and geopolitical uncertainties, including global trade tensions, a weakening economic outlook, and OPEC+ production increases, are increasing customer uncertainty and caution, with some short-cycle activity expected to slow[5] - The company will continue to focus on supporting customer operations, including adjusting global supply chains to mitigate the impact of new tariffs[5] - For the second quarter of 2025, revenue is expected to moderately improve sequentially, but full-year second-half activity may further decrease due to uncertainties[6] Q2 2025 Performance Outlook | Metric | Q2 2025 Outlook | Reference | | :--- | :--- | :--- | | Consolidated Revenue (YoY) | Down 1% to 4% | [10] | | Adjusted EBITDA | $250 million to $280 million | [10] | Segment Performance This section details the financial and operational performance of NOV's Energy Products and Services and Energy Equipment segments, including revenue, profitability, and order trends Energy Products and Services The Energy Products and Services segment experienced year-over-year declines in revenue and profitability, primarily due to lower industry activity and an unfavorable sales mix, partially offset by accelerated market adoption of new performance technologies Energy Products and Services Segment Q1 2025 Performance (Year-over-Year) | Metric | Q1 2025 | Q1 2024 | Change | Change Rate | Reference | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $992 million | $1,012 million | -$20 million | -2% | [7, 34] | | Operating Profit | $83 million | $121 million | -$38 million | -31.4% | [7, 44] | | Operating Margin | 8.4% | 11.9% | -3.5% | N/A | [7, 44] | | Adjusted EBITDA | $145 million | $174 million | -$29 million | -16.7% | [7, 44] | | Adjusted EBITDA Margin | 14.6% | 17.1% | -2.5% | N/A | [7, 44] | - The revenue decline was primarily due to lower industry activity, significantly impacting demand for the segment's short-cycle capital equipment products, though partially offset by accelerated market adoption of new performance technologies[7] - Lower sales volumes and an unfavorable sales mix led to decreased profitability[7] Energy Equipment The Energy Equipment segment saw a slight year-over-year revenue decrease but significant growth in operating profit and adjusted EBITDA, driven by backlog execution, improved pricing, and strong performance, with both new orders and backlog increasing Energy Equipment Segment Q1 2025 Performance (Year-over-Year) | Metric | Q1 2025 | Q1 2024 | Change | Change Rate | Reference | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $1.15 billion | $1.18 billion | -$0.03 billion | -3% | [8, 34] | | Operating Profit | $134 million | $95 million | +$39 million | +41.1% | [8, 44] | | Operating Margin | 11.7% | 8.1% | +3.6% | N/A | [8, 44] | | Adjusted EBITDA | $165 million | $119 million | +$46 million | +38.7% | [8, 44] | | Adjusted EBITDA Margin | 14.4% | 10.1% | +4.3% | N/A | [8, 44] | - Despite decreased aftermarket parts and service demand, increased revenue from backlog execution partially offset this impact, with improved pricing and strong execution enhancing profitability[8] Energy Equipment Segment Orders and Backlog | Metric | Q1 2025 | Q1 2024 | Change | Reference | | :--- | :--- | :--- | :--- | :--- | | New Orders | $437 million | $390 million | +$47 million | [9] | | Backlog Shipments | $549 million | $507 million | +$42 million | [9] | | Book-to-bill Ratio | 80% | 77% | +3% | [9] | | Capital Equipment Backlog (as of March 31) | $4.41 billion | $3.95 billion | +$458 million | [9] | Corporate Financials & Capital Allocation This section outlines NOV's capital allocation strategies, shareholder returns, and overall financial health, including debt levels and cash positions Capital Allocation & Shareholder Returns NOV returned $109 million to shareholders in Q1 through share repurchases and dividends, committing to return at least 50% of annual excess free cash flow to shareholders Q1 2025 Shareholder Returns | Metric | Amount | Reference | | :--- | :--- | :--- | | Share Repurchases | $81 million (5.4 million shares) | [11] | | Dividends | $28 million | [37] | | Total Capital Returned to Shareholders | $109 million | [11] | - The company plans to return at least 50% of annual excess free cash flow to shareholders through quarterly base dividends, opportunistic share repurchases, and annual supplemental dividends[11] Financial Position & Other Items As of March 31, 2025, NOV maintained a healthy financial position with ample cash and credit availability, and disclosed the primary components of "Other Items" for the quarter Financial Position as of March 31, 2025 | Metric | Amount | Reference | | :--- | :--- | :--- | | Total Debt | $1.74 billion | [12] | | Available under Primary Revolving Credit Facility | $1.50 billion | [12] | | Cash and Cash Equivalents | $1.16 billion | [12] | - The first quarter of 2025 recorded $13 million in "Other Items," primarily related to severance and the deconsolidation of Russian subsidiaries following additional U.S. sanctions on Russian operations[12] Operational Highlights & Strategic Developments This section showcases NOV's key contract wins, technology deployments, and innovation efforts across various energy sectors, demonstrating its market leadership and strategic growth initiatives Key Contracts & Technology Deployments NOV secured several significant contracts and technology deployments in Q1, spanning deepwater flexible pipelines, offshore wind, natural gas development, and unconventional drilling, solidifying its leadership in energy technology solutions - Signed an agreement with Petrobras to develop flexible pipeline solutions for high-CO2 deepwater applications, aiming to address CO2-induced stress corrosion cracking[13] - Awarded a contract to provide an integrated cable lay system for a new vessel for a Japanese client, supporting subsea infrastructure for offshore wind farm construction[14] - Secured a Triethylene Glycol (TEG) gas dehydration project from a Middle Eastern national oil company, strengthening NOV's position in natural gas development and production technologies[15] - NOV's downhole technologies achieved two of the longest single Bottom Hole Assembly (BHA) runs in U.S. onshore drilling, demonstrating the durability and performance of ERT™ power section technology[16] - Awarded a contract to supply XLW-S connectors for the GranMorgu development project offshore Suriname, enhancing operational safety and accelerating run speeds[17] - Provided integrated BHAs for an operating company in a Middle Eastern unconventional field, achieving the highest average performance for 16-inch and 12-inch hole sizes and setting a field record for 12-inch Rate of Penetration (ROP)[18] - Developed and delivered customized choke valve solutions for a major Middle Eastern operator, significantly improving production capabilities and securing multiple additional orders[19] Innovation & Market Expansion NOV continues to innovate in AI, composites, thermal insulation coatings, and digital solutions, successfully expanding into the Icelandic geothermal market, enhancing its technological leadership and market influence - NOV's Drilling Bit Analytics (DBA) solution continues to gain global traction, utilizing AI to provide real-time wellbore insights, applied across 20 million feet of drilling operations, and successfully deployed in geothermal drilling[20] - Awarded contracts to supply STAR™ Super Seal Key Lock (SSKL) composite pipe for a produced water infrastructure project in West Texas and a production facility expansion in the Middle East, demonstrating leadership in non-corrosive composite solutions[21] - Successfully delivered Tuboscope's TK™ Drakōn thermal insulation coating for high-pressure, high-temperature environments in the Haynesville and Eagle Ford shales, with customers expanding their investment[22] - Awarded a contract to upgrade existing U.S. workover rigs from conventional to AC electric operations, integrating PLC controls and data acquisition systems to enhance operational efficiency and wellsite accountability[23] - Secured a contract to provide customized solids control solutions for a geothermal drilling project in Iceland, marking NOV's entry into the expanding Icelandic geothermal market[24] Additional Information This section provides essential background on NOV, clarifies the use of non-GAAP financial measures, and includes cautionary notes regarding forward-looking statements About NOV NOV is a global energy industry technology solutions provider with over 150 years of history, dedicated to empowering customers to safely produce energy through innovation, while minimizing environmental impact and driving energy transition - NOV (NYSE: NOV) is dedicated to providing technology-driven solutions that empower the global energy industry[26] - With over 150 years of innovation, the company helps customers safely produce abundant energy, minimize environmental impact, and facilitate the energy transition towards a more sustainable future[26] Non-GAAP Financial Measures Non-GAAP financial measures like free cash flow, excess free cash flow, and adjusted EBITDA, included in this release, are considered useful by management and investors for assessing the company's financial performance but are not substitutes for GAAP measures - Non-GAAP financial measures such as free cash flow, excess free cash flow, and adjusted EBITDA are considered useful tools by management and the investment community for evaluating NOV's overall financial performance, but they are not substitutes for GAAP financial measures[28] - Free cash flow and excess free cash flow do not represent the company's remaining cash flow available for discretionary expenditures, as their calculations do not account for certain debt repayment requirements or other non-discretionary outlays[28] - The company has not provided a reconciliation of projected adjusted EBITDA because management cannot reasonably predict certain necessary components of net income, such as other income (expense), with reasonable accuracy[29] Cautionary Note Regarding Forward-Looking Statements This document contains forward-looking statements involving risks and uncertainties, where actual results may differ materially from expectations, requiring investor caution, and the company undertakes no obligation to update these statements - This document contains forward-looking statements involving risks and uncertainties, where actual results may differ materially from expectations due to factors such as changes in oil and gas prices, customer demand, catastrophic events, intellectual property protection, legal compliance, and global economic activity, including Russian sanctions and changes in U.S. trade policy[30] - Investors should exercise caution with any such forward-looking statements, and the company undertakes no obligation to update any such factors or forward-looking statements to reflect future events or developments[30] Financial Statements This section presents NOV Inc.'s unaudited consolidated financial statements, including the statements of income, balance sheets, cash flows, and reconciliations of non-GAAP measures Consolidated Statements of Income This section presents NOV Inc.'s unaudited consolidated statements of income, covering financial performance for the three-month periods ended March 31, 2025, December 31, 2024, and March 31, 2024 NOV INC. Consolidated Statements of Income (Unaudited) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :--- | :--- | :--- | :--- | | Energy Products and Services Revenue | $992 million | $1,017 million | $1,060 million | | Energy Equipment Revenue | $1,146 million | $1,178 million | $1,287 million | | Total Revenue | $2,103 million | $2,155 million | $2,308 million | | Gross Profit | $447 million | $458 million | $493 million | | Operating Profit | $152 million | $162 million | $207 million | | Net Income | $74 million | $121 million | $161 million | | Net Income Attributable to NOV Inc. | $73 million | $119 million | $160 million | | Basic Earnings Per Share | $0.19 | $0.30 | $0.41 | | Diluted Earnings Per Share | $0.19 | $0.30 | $0.41 | Consolidated Balance Sheets This section presents NOV Inc.'s unaudited consolidated balance sheets, detailing assets, liabilities, and stockholders' equity as of March 31, 2025, and December 31, 2024 NOV INC. Consolidated Balance Sheets (Unaudited) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and Cash Equivalents | $1,157 million | $1,230 million | | Accounts Receivable, Net | $1,790 million | $1,819 million | | Inventories, Net | $1,942 million | $1,932 million | | Contract Assets | $680 million | $577 million | | Total Current Assets | $5,784 million | $5,770 million | | Property, Plant and Equipment, Net | $1,953 million | $1,922 million | | Goodwill and Intangible Assets, Net | $2,127 million | $2,138 million | | Total Assets | $11,273 million | $11,361 million | | Liabilities and Stockholders' Equity | | | | Accounts Payable | $796 million | $837 million | | Accrued Liabilities | $685 million | $861 million | | Contract Liabilities | $520 million | $492 million | | Total Current Liabilities | $2,182 million | $2,347 million | | Long-Term Debt | $1,699 million | $1,703 million | | Total Liabilities | $4,779 million | $4,933 million | | Total Stockholders' Equity | $6,494 million | $6,428 million | | Total Liabilities and Stockholders' Equity | $11,273 million | $11,361 million | Consolidated Statements of Cash Flows This section provides NOV Inc.'s unaudited consolidated statements of cash flows, detailing cash flows from operating, investing, and financing activities for the three-month periods ended March 31, 2025, and March 31, 2024 NOV INC. Consolidated Statements of Cash Flows (Unaudited) | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $135 million | -$78 million | | Net Cash Used in Investing Activities | -$81 million | -$311 million | | Net Cash Used in Financing Activities | -$135 million | $43 million | | Effect of Exchange Rate Changes on Cash | $8 million | -$2 million | | Decrease in Cash and Cash Equivalents | -$73 million | -$348 million | | Cash and Cash Equivalents at End of Period | $1,157 million | $468 million | Reconciliation of Non-GAAP Measures This section provides reconciliations of cash flow from operations to free cash flow and excess free cash flow, and net income to adjusted EBITDA, to help investors better understand the company's operational performance Reconciliation of Cash Flow from Operations to Free Cash Flow and Excess Free Cash Flow (Unaudited) | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $135 million | -$78 million | | Capital Expenditures | -$84 million | -$69 million | | Free Cash Flow | $51 million | -$147 million | | Business Acquisitions, Net of Cash Acquired | — | -$243 million | | Excess Free Cash Flow | $51 million | -$390 million | Reconciliation of Net Income to Adjusted EBITDA (Unaudited) | Metric | March 31, 2025 | March 31, 2024 | December 31, 2024 | | :--- | :--- | :--- | :--- | | GAAP Net Income Attributable to NOV Inc. | $73 million | $119 million | $160 million | | Noncontrolling Interests | $1 million | $2 million | $1 million | | Provision for Income Taxes | $47 million | $44 million | $38 million | | Interest and Financing Costs | $22 million | $24 million | $24 million | | Interest Income | -$11 million | -$8 million | -$11 million | | Equity (Earnings) Loss in Unconsolidated Affiliates | — | -$29 million | $1 million | | Other (Income) Expense, Net | $20 million | $10 million | -$6 million | | Gain on Sale of Property, Plant and Equipment | -$2 million | -$1 million | — | | Depreciation and Amortization | $89 million | $83 million | $88 million | | Other Items, Net | $13 million | -$3 million | $7 million | | Total Adjusted EBITDA | $252 million | $241 million | $302 million |